Offshore private banks can be found in just about every part of the world. Designed to meet the needs of individual customers, some of these banks tend to cater to what is referred to as “high net worth individuals,” while others seek to appeal to a broader clientele that includes persons with middle-class incomes.
With offshore banks that are known as private banks, the range of services may or may not focus solely on individual accounts.
While the range of services offered may vary, offshore private banks are likely to offer a core group of services. If any of these fit in with your financial planning, there’s a good chance that establishing offshore accounts would be a wise move.
Basic Checking and Savings Accounts
Establishing basic checking and savings accounts often provides the foundation for any offshore financial strategy. These accounts allow you to take advantage of the competitive interest rates that apply. In many scenarios, you will need to maintain a minimum balance to qualify for receiving interest.
Keep in mind that some international banks require minimum deposits to open these accounts. Others may allow you to open accounts with smaller balances, but no interest will be accrued until those balances exceed a stated amount. This is good news for those who need to begin saving with less money and plan on adding to the balances over time.
Time or Term Deposit Accounts
It’s not unusual for private offshore banks to offer what’s known as time or term deposit accounts. These work much like their domestic counterparts. Depositors open the accounts with the balances required and commit to leaving the funds in those accounts for an agreed-upon period. At the end of the stated term, the balance has earned interest.
With many banks, account holders have the option of withdrawing all the funds and closing the account or rolling the entire balance into another term. There’s also the option of transferring the interest to your offshore checking or savings account and allowing the principle to roll over into another term.
International Electronic Transfers
Fund transfers are a staple of most offshore private banks. The funds may be in the form of wire transfers between the bank and the recipient of your choice. There’s also the possibility of arranging electric funds transfers from one of your accounts to accounts at a different institution.
The goal is to ensure that funds can be moved securely and without any delays. Depending on the type of transfer you have in mind and the banking laws that apply, it’s possible to know if the transaction can be completed in one business day or if it will take longer for the funds to reach the recipient.
International Debit and Credit Cards
Your offshore checking and some of your other accounts may include the ability to order debit cards. In many instances, those cards make it easy to conduct transactions using the common currency in the area where you’re traveling. This can often allow you to make the best use of favorable currency exchange rates. As you conduct transactions, the amounts are deducted from the account balance.
There are also international credit cards that serve the same purpose. You have the chance to make use of the best possible rates of exchange for your charges. The difference is that you would receive a statement with the current credit card balance after the period closing date and need to pay that balance according to the account terms. Opting for this strategy rather than using your domestic credit cards often results in fewer fees and lower rates on the charges.
Multicurrency Banking Services
Investment is also part of what many private offshore banks offer their clientele. That includes the ability to invest in currency or FOREX trading as a way to generate profits. It’s possible to exchange multiple currencies as a way to generate greater income by using the balance in one of your offshore accounts. This would be done when the exchange rates were to your advantage.
Many offshore banks provide investment counselors who can aid in understanding when to buy currencies, how long to hold them, and when to sell in order to enjoy a return. Given the fast-paced nature of this type of investment, having financial counseling to try this approach to building wealth is highly recommended.
Lending is also a typical service provided by offshore banks. The loans may have to do with tasks like debt consolidation as a way to save money and eliminate debt faster. You may also find that many banks have real estate arms that can help you purchase developed or undeveloped properties in the countries where the bank resides.
While this can be helpful in terms of securing a vacation home in an offshore location, it’s also great for buying what will eventually be the place you will live after retiring. As part of the support, bank professionals can help clients understand all fees and taxes related to property ownership and even help establish a payment system that ensures nothing is left unpaid.
International Investment Accounts
International investments like stocks, bond issues, and other assets can be attractive for several reasons. One has to do with the variety; some of the investments that you find on the international markets are not available domestically. See this as one way to broaden the range of investments that you maintain.
Another has to do with the potential returns and the possibly lower cost of trading. It’s not unusual for some international banks with investment arms to provide services at competitively low costs. Assuming the investment laws in the nation where you originate these trades are favorable, you could stand to increase your wealth by a significant margin.
Miscellaneous Documents Related to Your Accounts
International private banks offer document services that can make managing your wealth easier. There are periodic statements detailing account activity since the last cycle. You can also obtain letters that confirm your current status with the bank, including letters of credit affirming that you have resources on hand to cover certain purchases.
Bank or promissory notes are also available as part of the services you receive. If you need certified checks or help with preparing bank drafts, authorized personnel are happy to comply.
Enjoy the Advantages of Offshore Banking
Doing business with private international banks means enjoying access to all the services you’re used to at home. There’s the possibility that you may enjoy access to some additional services based on what the international banker has to offer.
Consider the location of the bank and the range of services carefully. Opting for one that will help you move toward your goals will deliver a favorable outcome.
Luigi Wewege is the Senior Vice President, and Head of Private Banking of Belize based Caye International Bank, a FinTech School Instructor and the published author of The Digital Banking Revolution – now in its third edition.
You can follow his posts on trends shaping the banking and financial services industry on Twitter: @luigiwewege
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