If you are new to offshore trading and investing, you may ask yourself: what does an offshore bank account offer me than a standard bank account? The answer to this is that it provides you with a broad range of benefits. You should note that offshore bank accounts are bank accounts outside the country you are residing. The following are reasons to have them.
Dilute your political risk
Nowadays, the major risk to a person’s investments is his or her government. There is no doubt that a government poses a threat to your savings. As you know, they are turning to same desperate measures, which they have applied down the history. You may have heard of bank deposit taxes and capital controls in many countries. When you protect some of your savings in other foreign banks, you are protecting yourself in case your government becomes mad.
Sound banking systems
Most countries have banking systems, which are simply unsound. This is because insolvent governments back them. Moreover, they hold a small amount of cash to meet withdrawal requests from customers. Therefore, if there is a financial shock, you are likely to have problems withdrawing your money. Fortunately, offshore banks have responsible custodians for your hard earned money.
There are millions of lawsuits filed every year. Unless you are lucky, sooner or later, you are going to be a victim. These legal suits are competing for your money. Although there is nothing like 100% protection, foreign bank accounts make you less attractive target. Offshore bank account provides protection against overzealous government agencies that are out there to freeze your assets. This is because their reach does not extend beyond your country. If you find yourself wrestling with your government, a foreign account is what you all need.
Holding currencies is an amazing way of diversifying your portfolio risk, internationalize your savings and protect the purchasing power. Domestic banks have limited options for foreign currencies. On the other hand, offshore banks provide convenient online platforms to hold foreign currencies.
High interest rates
Domestic banks have manipulated interest rates to very low amounts. This means that they transfer wealth away from the savers. You may realize that the interest you are earning does not even match with high inflation. However, if you look at offshore countries, you will find banks that pay higher rates than at home.