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Offshore savings accounts
The Ins And Outs Of Offshore Savings Accounts

The vast majority of us have standard savings accounts held with a US bank, simply because that’s pretty much the way we’ve always done things.  We may have heard of offshore savings accounts, but they have usually been mentioned when we’ve been watching a whodunit type of television program.  It’s small wonder then that their existence is still somewhat shady.

But in reality, there is nothing so sinister about offshore savings accounts.  Here are some facts you may not be aware of about offshore savings accounts:

  • They aren’t restricted to millionaires.  While you will need more than a dollar to open offshore savings accounts, you don’t need to be rolling in millions either.  Several thousand dollars will be enough to open most offshore savings accounts, enabling you to start benefiting from more interest right from day one.
  • They can save you money.  Unfortunately, you won’t be able to escape entirely from paying tax on your interest, but it will be paid to you in full.  That means it’s up to you to tell the taxman about it, and by the time he demands his share, you will have earned even more money on it.  Considering that many offshore savings accounts are quite well stocked with cash, this can amount to a significant difference in the money you will earn.
  • They can benefit people who travel frequently for business or pleasure. Because offshore savings accounts aren’t based in the country, they don’t automatically deal in U.S. dollars.  Some are Euro-based, while others are happy to deal in several currencies.  This is a great benefit if you are constantly on the move, as you have the option of paying in currencies.  This makes the account more versatile in many cases.
  • You can defer your interest to a time when it suits you.  You might need to pay tax on that interest eventually, but with offshore savings accounts, it is possible to do it when you want to, rather than when the taxman demands it.  So for example, if you know that next year could be a hefty year with a large tax bill looming at the end of it, you can leave your interest sitting right where it is.  If your tax bill will be a lot lower in the following year, you can withdraw the money and pay the tax on your interest then instead.

There are plenty of different types of offshore savings accounts from which to choose, and it’s worth doing your research to see which one suits you.  As with any type of bank, offshore banks also offer a wide range of other services, including current accounts that could be of interest if you travel widely and need an account that is easy to manage in many countries.

In short, if you have a reasonable amount of savings and you want to take more control over when you pay the tax on your interest, offshore savings accounts could prove to be a viable answer.

Check out our best savings accounts

 
 
 
 
 
 
 
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