Reasons Why You Need an Offshore Bank Account Today

 

You may have wondered: “What can an offshore bank account give me that an account at Bank of America can’t?”
The answer is: A wide range of benefits you absolutely need.
An offshore (or foreign) bank account is simply a bank account you have outside of your country of residence.
Here are the top 10 reasons why you should open one now.

Reason #1: Dilute Your Political Risk

Today, the biggest threat to your savings isn’t market risk. It’s your own government.
There’s no doubt government poses an increasing risk to your savings. Governments are sinking hopelessly deeper into insolvency. Predictably, they are turning to the same desperate measures they’ve used throughout history.

It’s only prudent to expect more bail-ins (as we’ve seen in Cyprus), bank deposit taxes (as we’ve seen in Spain), retirement savings nationalizations (as we’ve seen in Poland, Hungary, Portugal, and Argentina), and capital controls (as we’ve seen in Cyprus and Iceland), among other destructive actions. And these are just a few recent examples.

If you think these kinds of things can’t happen in your country, think again.

In short, keeping some of your savings in the right foreign bank can largely protect you from madness in your home country.

Reason #2: Sounder Banking Systems and Banks

Almost all of the banking systems in Western countries are fundamentally unsound. They’ve leveraged themselves to the hilt. The promises of insolvent governments are all that back them. Worse, most of these banks only keep a tiny bit of cash on hand to meet customer withdrawal requests. This means, in the event of another Lehman-style financial shock, you could have trouble accessing your money

There are banks in stable jurisdictions with low debt that don’t gamble with customer deposits (i.e. your money). Many of these banks are much better capitalized, keep more cash on hand, and are otherwise much more conservatively run than those in the U.S.

These offshore banks are almost always more responsible custodians of your hard earned savings.

Reason #3: Asset Protection

Maybe you think it’s just other people who live on the lawsuit firing line…and you live somewhere else. Think again.

The Legal Resource Network reports that 15 million lawsuits are filed in the U.S. every year.

An offshore bank account also protects you from overzealous government agencies armed with the summary power to freeze your assets. That’s because their reach doesn’t extend beyond the U.S.

If you ever find yourself in a wrestling match with a government agency or a frivolous lawsuit, a foreign bank account give you resources you can count on.

Reason #4: Currency Diversification

Holding foreign currencies is a great way to diversify your portfolio risk, protect your purchasing power, and internationalize some of your savings.

Chances are, though, your domestic bank offers few, if any, options for holding foreign currencies.

Offshore banks, on the other hand, commonly offer convenient online platforms for holding foreign currencies.

Reason #5: Higher Interest Rates for Your Deposits

In what amounts to a war on savers, the European Central Bank and the Fed have manipulated interest rates to near historic lows. These artificially low interest rates effectively transfer wealth away from savers, who would otherwise enjoy higher returns on their deposits, to borrowers.

In fact, if you live in the West, there’s a good chance the interest you’re earning on your savings isn’t even keeping pace with the real rate of inflation.

If you look abroad, though, you can find banks that pay significantly higher interest rates than what you’d find at home.

Reason #6: Ensure Access to Medical Care Abroad

If you’re unable to receive timely treatment in your home country, an increasing possibility with the disastrous Obamacare, you may want to access medical care abroad.

In the worst-case scenario, this could mean the difference between life and death.

Suppose, for whatever reason, you cannot get the medical care you need in your home country and you have to go abroad. You would have to transfer money abroad to pay for it. However, if your home government has already imposed capital controls, it could be difficult or impossible to pay for the medical care you need.

This is where having a foreign bank account, which isn’t hostage to capital controls in your home country, can help ensure you can always pay for the medical care you need.

Reason #7: The Ability to Act Quickly

When it comes to international diversification, it’s always better to be a year early than a minute too late. Once a government has imposed capital controls or levied bank accounts, it’s too late to protect your money.

If you don’t already have one, you should open an offshore bank account now, even if it’s a small one. Just having one available, regardless of how much money you initially put in it, gives you meaningful benefits. It gives you the option to act quickly and transfer more money abroad in the future, should the situation warrant it.

Reason #8: Maintain Limited Privacy

Americans who have an aggregate of $10,000 or more in foreign financial accounts at any time during the year must report it. However, if the aggregate total of your foreign financial accounts remains under $10,000 for the year, and you are not using a trust, LLC, or other structure, you don’t necessarily have to report it. Always consult with your tax advisor on these matters.

Reason #9: Peace of Mind

An offshore bank account is like an insurance policy. It helps protect you from unsound banks and banking systems and the destructive actions of a bankrupt government. It also makes you a hard target for frivolous lawsuits and ensures you can pay for medical care abroad. Knowing that you’ve taken a big step to protect yourself should give you more peace of mind.

Reason #10: Maximize Your Personal Freedom

Having a foreign bank account gives you more options. More options means more freedom.
It’s a crucial step in freeing yourself from absolute dependence on any one country.

Achieve that freedom, and it becomes very difficult for any government to control your destiny.

Is Having an Offshore Bank Account Legal?

Despite what you may hear, offshore banking is completely legal. It’s not about tax evasion or other illegal activities. It’s simply about legally diversifying your political risk by putting your liquid savings in sound, well-capitalized institutions where they are treated best.

It’s no secret that it is becoming harder and harder to open a foreign bank account. Soon it could be impossible. This is a strong incentive to act sooner rather than later – even if you don’t plan to use the account immediately.

Even if your home government doesn’t slap on capital controls or confiscate deposits, you’re no worse off for having moved your savings to a safer home. In fact, you’re far better off for the reasons described above. Obtaining an offshore bank account is a prudent step that makes sense no matter what.