Every millennial is now on the race to acquire a state of financial stability sooner, rather than later. With increasing cost of living, climbing house prices, the need to save money for rainy days, many millennials are planning to set up a savings account in overseas banks and institutions. This very facility is called Offshore Banking. But the question is, is it safe, secure, legal and right way to save one’s hard earned money?
Contrary to the popular notion, Offshore banking is not restricted for only the super-rich. Any average person, with proper professional advice, can open a completely legal Offshore bank account within a matter of few hours. Offshore accounts are not under the protection of the Financial Services Compensation Scheme (FSCS), whose function is to protect savings held with authorised UK banks and building societies, up to £85,000 per person.
A large number of account holders in order to protect their wealth on a daily basis are deciding to choose offshore banks. Minimizing tax burden, high level of privacy, around-the-clock availability, currency diversification, and more and more, are some of the many advantages of having an Offshore account. Offshore banking offers many potential benefits such as earning higher interest rates and tax benefits, ability to bank in foreign currencies, etc. This is particularly beneficial to those who often travel overseas for work or leisure since it provides the facility to receive multiple currencies without having to pay for exchange fees. This also safeguards one from the exchange rate fluctuations. This sense of security gives the account holder a confidence to choose offshore banking even though they are not extremely wealthy. It also offers greater asset protection against future uncertainties and threats such as divorce lawyers, creditors and legal actions which at times cost a lot of money, offshore banking will provide a secure solution for managing one’s money well. While offshore accounts could provide a tax-efficient way to save and invest, you need to disclose your income to any relevant tax authorities and declare any interest earned on offshore accounts. Some offshore accounts charge for international transfers and have monthly fee. Others don’t. All of these perks will be subjected to the rules and regulations of the country which harbours the bank. For more security and reassurance, many banking jurisdictions offer strict, financial privacy and confidentiality agreements and ensures that one’s information is not shared with any third party and one’s assets are shielded to safeguard one’s information. Here are some aspects to be considered before opening an Offshore account: Reputation shows the jurisdiction and banking system quality. A well-reputed banking country will bring in highly pro-business and stable environment. However, it can be quite challenging for how easy it is to deal with if one is a foreigner open bank accounts by oneself in such countries. Usually, due to its complicated requirements, more efforts will need to be made to open an offshore bank account in these places. A large number of foreigners especially for those being start-ups, entrepreneurs or SMEs, may think of Low Deposit as the key factor to find their best offshore bank account. Some offshore banks even do not mandate the requirement of initial account for opening a bank account. Some banks require the deposit minimums for foreigners at a minimal cost. The timeframe of most offshore banks for the account opening process is quite similar to each other. Typically, it can take you only several working days to get your accounts opened.