When you hear the term offshore accounts, your first thought may well be corrupt businessmen and crooked politicians stashing their holdings away in Switzerland. Don’t despair if you don’t fit into either category or find nothing at all fascinating about fine chocolate or cuckoo clocks. Even the most honest person among us can utilize all the advantages of offshore accounts. They exist for those who want to protect their assets from the taxman and other creditors as well those who would simply like a little more protection of their privacy than can be gotten from American banks. If offshore accounts happen to have developed a reputation for being exploited for the worst of reasons by the most dishonest of people, that hardly disqualifies them from being used by honest people.
Besides, there are plenty of other reasons you might want to avoid taking advantage of offshore banking accounts like the big boys. Even that rarest of all birds: the big boys who play fair.
If you are put off by the cost of paying American banks for the privilege of keeping your money, you may want to think again about parking your money in an offshore account. The actual cost of opening and maintaining foreign bank accounts that provide all the advantages that they do indeed provide will vary depending on the country, bank and the desired services. That said, don’t be surprised to see yearly bank statements with fees of five figures. Not to mention that minimum deposits just to open offshore accounts as well as to continue to be allowed to take advantage of those services can make this opportunity to climb out from the beneath the under regulated thumb of the American banking system impossible for at least half of the 99%.
Low Interest Rates
The one reason not to deal with offshore accounts is investment potential. Again, figures can vary considerably, but it is almost guaranteed that, for the time being at least, you will not see the kind of return on money deposited in offshore accounts that you currently enjoy in a domestic bank. So, hey, score one for the American banking system.
The most frustrating disadvantage of offshore accounts is the looming threat of political instability. Pick the locale of your foreign bank with at least some peripheral vision directed toward the political climate surrounding it. In the great majority of cases, such upheaval will never impact your holdings the entire time you keep them there. On the other hand, all it takes is one quick revolution and government overthrow for you to be facing the possibility of losing everything you have invested in an offshore account.