An offshore bank account is one that you open and operate in a country outside your country of residence.
With an offshore account, you can make and receive international payments, save and invest in several currencies, and sometimes even manage your finances across multiple countries and regions. For those who live in emerging markets, it could also provide an important way to protect your wealth from the impact of political and economic instability.
If after obtaining the appropriate financial advice you have determined that an offshore account is the right fit for you, the next important step would be to identify the right bank for your needs. Here are 3 factors to consider before choosing an offshore bank:
1. Safety
Technically, when you open an account in any country outside of yours, it’s an offshore account. Practically, however, before choosing an offshore bank, you should take a close look at the jurisdiction governing the bank to ensure it is a safe place to keep your money.
Some of the considerations should include understanding what the offshore bank’s local banking governance looks like, whether your money will be protected by a compensation scheme etc. For instance, when you open a bank account with Xapo Bank, your fiat savings are protected by the Gibraltar Deposit Guarantee* for up to the US Dollar equivalent of EUR100,000 which is the equivalent level of protection provided by banks in Europe and the UK.
2. Cost
Offshore banking typically involves fees. Some offshore banks may charge a monthly maintenance fee, international transfer fees etc. As fees and costs vary by bank, you should carefully read through the terms and conditions of an offshore bank’s service before opening an account. In Xapo Bank’s case, as a Private Bank with an exclusive and limited member base, we charge an annual membership fee upfront. This gives our members unlimited access to all our benefits including interest paid on deposits, an exclusive metal card, as well as some of the most competitive Bitcoin prices and transparent fees in the market.
3. Products offered
The right offshore bank is one that offers products and services that meet your requirements for having the account in the first place. While offshore accounts come with different features and benefits, some of the more popular ones include:
- Enabling you to hold money, as well as make and receive payments in multiple currencies. A Xapo Bank account goes one step further by giving you access to both US Dollars and Bitcoin.
- Potentially give you access to savings and investments, which could vary depending on your personal circumstances, country of origin etc.
- Ability to onboard from anywhere in the world, subject to meeting the requirements and having the necessary documentation. At Xapo Bank, our members onboard via our digital app, which is also how they seamlessly manage their accounts and stay in control of their finances.
Disclaimer
This article is for general information purposes only and is not intended to constitute legal or other professional advice or a recommendation of any kind whatsoever and should not be relied upon or treated as a substitute for specific advice relevant to particular circumstances. We make no warranties, representations or undertakings about any of the content of this article (including, without limitation, as to the quality, accuracy, completeness or fitness for any particular purpose of such content), or any content of any other material referred to or accessed by hyperlinks through this article. We make no representations, warranties or guarantees, whether express or implied, that the content on our site is accurate, complete or up-to-date.
