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What are International Banks?

What are International Banks

By Luigi Wewege, Senior Vice President, and Head of Private Banking of Belize based Caye International Bank

The concept of international banks is nothing new, but it does seem unfamiliar to many people. Common questions can include:

  • What is it about international financial institutions that attracts so much attention?
  • Are they all that different from domestic banks?
  • What are some of the reasons why people would choose to establish accounts at international banks along with maintaining domestic accounts?

Could it be that an account or two at an international bank would be helpful in your case? Here are some basics that will help you understand more about these banks and what they can do for you.

Defining the Meaning of an International Bank

An international bank is a financial institution that is based in a foreign location and provides services to clients from around the world. In many ways, international banks provide services and support that is familiar to anyone who has maintained any type of bank account. What is different is the additional services that are often included.

There’s more than one type of international bank. The one that most people and many business owners will use is known as an offshore private bank. There are also institutions that are classed as correspondent banks, offshore banking centers, and subsidiary banks. For now, let us focus on what private banks have to offer and how they compare and contrast with domestic banks.

Who Can Benefit from Opening Accounts at an International Bank?

The short answer is that just about anyone can benefit from opening a savings, time deposit, or checking account at an international bank. This applies to those who are considered wealthy, but people who earn middle-class incomes can also make use of this type of financial resource.

People who want to build up financial reserves while taking advantage of excellent interest rates should consider opening offshore accounts. Those who want to expand their investment portfolios to include international investments may find going through an offshore bank is a smart move.

When the goal is to set aside funds specifically for retirement, opting for offshore accounts is a great idea. Even business owners who want to establish a presence that makes it easier to conduct business on an international scale may find that offshore accounts are a better option.

Does the Location Really Matter?

Choosing to open any type of banking or investment account with an international bank means considering the right location. It’s important to remember that banking laws can vary from one nation to the next. By understanding how those laws apply and what they mean in terms of building wealth, it’s important to look for a few qualities.

You want to consider banking options in nations with a proven track record of political and economic stability. The regulations that govern international accounts must provide a reasonable amount of protection for depositors.

Access to the accounts also matters; the ability to manage them online as well as in person is a plus. You want to ensure that your banking information is considered proprietary and that it will not be shared with outside entities unless you provide permission. Finally, you want to ensure that the return on your balances is competitive and somewhat consistent.

What Types of Banking Services Are Offered?

You will find that the ideal international bank offers accounts that are much like those you use at home. Checking and savings accounts are prime examples. As with many domestic accounts, these international counterparts provide interest if you maintain over a certain balance. Top offshore banks provide debit cards for checking accounts, allowing you to access your funds at will. In some instances, using the debit card connected with your international account will be a better choice than using a domestic one.

There are also time deposit and different forms of investment accounts to consider. One of the benefits of the latter is that you may be able to include investment options that are not available in your country of origin. That helps broaden the scope of your portfolio and possibly add additional security against economic shifts. For the former, you’ll find the rate that applies for the term you select is often competitive with what you could get with similar accounts at home.

Tips for Choosing the Right International Bank

You already know that the location is important to choosing the right international bank. Regulations and banking laws are reasons why the location matters. Ideally, those laws provide protections for you and the resources held in those accounts. This is particularly important if you plan on retiring in the nation where those accounts are based. When time for retirement comes, moving around your assets will be much easier with those established accounts.

Do take the time to find out more about how the bank operates. Does it have an investment arm that would allow you to take advantage of opportunities to build more wealth? If the plan is to invest in real estate within that nation, does the bank have loan programs that you could use? Will you need an agent to manage your accounts or can you take care of this remotely as well as when you visit the nation?

Finally, the absence of a language barrier will definitely make communicating simpler.

Managing Your International Bank Accounts

On the issue of account management, do ensure that you know exactly what policies and procedures you will need to follow. Today, many international banks provide customers with secure access to their accounts.

With some banks, it’s possible to set up a single point of access that includes a username and password, along with some secondary form of identification. In this scenario, you would be able to log in to a central interface and manage everything from moving money from a savings to a checking account, shift returns from your investment account to the checking or savings account, or move money from a checking or savings account to an investment account.

The value of online access is that you can do your banking any time of the day or night. While the transactions may not complete until the following business day, you can clearly see the status at any time. For example, you may see a transfer of funds from the checking to the savings account occur immediately. If you set up a transfer to a different institution, that may not show as completed until the following business day.

Final Thoughts on International Banks

As with domestic banks, it pays to research the choices thoroughly. Be sure you know what to expect in terms of transaction fees, limits on transaction totals per business day, and the options for customer service and support that are available.

Once you are comfortable with what the bank has to offer, set up an account and see how things go. If you are happy, establishing additional accounts with that same bank may be in your future.

How to Open Your International Bank Account

Have you given some thought to opening an account with an international bank? The financial service professionals at Caye International Bank can provide guidance in determining what type of accounts would help you work toward your financial goals. Start today and those accounts could be in place a lot faster than you thought possible.

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Luigi WewegeAuthor bio:
Luigi Wewege is the Senior Vice President and Head of Private Banking of Caye International Bank, headquartered in Belize, Central America. Outside of the bank, he serves as an Instructor at the FinTech School in California, which provides online training courses on the latest technological and innovation developments within the financial services industry. Luigi is also the published author of The Digital Banking Revolution, available in audio, Kindle, and paperback formats throughout all major international online bookstores – now in its third edition.


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