If you are an independent businessman or woman with business across the globe, at times, I am sure you have wondered as to the benefits of an offshore bank account over the one that you already have at your country of residence. Well, if this doubt has been eating away in your mind, today’s article is for you, as we will share with you the top 5 reasons as to why you should seriously consider opening an offshore bank account today.
Without further ado, let us get started.
What Is an Offshore Bank Account?
5 Reasons to Open an Offshore Bank Account Today
Conclusion
What Is an Offshore Bank Account?
Before we dive into the intricacies of why you should have an offshore bank account to your name, it is immensely important that you understand the exact meaning of the same.
In simple terms, an offshore bank account can be understood as one that is present in a country outside its own country of residence. As the name suggests, since it is an offshore establishment, the rules and laws of your residence country do not apply here, making these an attractive option for those who want to protect their hard-earned money to the maximum extent possible.
5 Reasons to Open an Offshore Bank Account Today
Now that you understand the exact meaning of an offshore bank account, here are 5 reasons why you should consider opening one today.
1. Reduce Your Political Risk
If you are an influential individual, I am sure you are well aware of the fact that today the biggest risk to your money is not the markets, but your very own government. If you have taken notice over the recent events in nations around the world, influential individuals are being targeted by governments who do not have the ability to manage their own finances and use them as scapegoats to bail out of a faulty situation.
As American Columnist Andrew Napolitano recently noted in an interview, “people who have more than $100,000 in the bank are targets for any government that’s looking for money to shore up its own inability to manage its finances.”
While there are many solutions to this problem, in our experience, having an offshore bank account is the most promising as it limits your government’s ability to immediately access your assets and render them useless with a few taps on the keyboard. Choosing the right location for opening an offshore bank account is also crucial, as it directly affects the risk your assets are exposed to.
However, we can unanimously agree to the fact that securing a portion of your assets in an offshore bank account will safeguard it from the madness in your home country.
2. Sounder Banking Infrastructure
One common issue with banks of leading nations is the lack of liquidity they regularly face. Since banks are part of a centralized system in most developed nations, as per mandate, they can keep only a portion of their deposits as cash reserves and transfer the remaining amount to the central bank for safekeeping.
While this seems like a practical solution for banks, when you take a look at this situation from the perspective of the depositor, you will quickly realize that there might be a day when you will be required to withdraw all your money, and your banking partner will not be able to meet their obligations.
On the other hand, most offshore bank accounts are managed by banks that are more conservatively run as compared to institutions of developed nations. Due to this, most offshore banking institutions often carry a significant amount of cash reserves and thus provide a guarantee to meet your withdrawal requirements at all times.
3. Currency Diversification
As a financially literate individual, I am sure you are aware of the term Portfolio Diversification. Essentially, it translates to not putting all your eggs in one basket and investing equal amounts in various assets, such that each of them can balance each other out. While there are many avenues where you can invest and actively diversify your money, one of the best is holding foreign currencies.
Investing a significant amount of your money in a foreign currency of your choice not only increases your buying power but also makes sure that your money is protected in a situation where your local currency is going for a toss.
Although most bank accounts offer an investment option in foreign currencies, chances are that your options are pretty limited. However, since an offshore bank account primarily deals in a foreign currency, it actively helps you invest your money and safeguard it from market risks. Along with this, most offshore banking solutions offer their customers a wide selection of foreign currencies to choose from, making it an attractive option for portfolio diversification.
4. Higher Interest Rates
The interest rates you enjoy by keeping money in your account is decided both by the central bank as well as the government of your country. However, if you take a close look at the interest rates offered by bank accounts in developed nations, they are at an all-time low, meaning that in some cases, they are not even keeping up with the rate of inflation.
On the other hand, since offshore bank accounts are managed by financial institutions for whom customer service and satisfaction is key, they generally tend to offer a higher rate of interest on the same amount of investment. Along with this, the government has no direct control over the interest rates offered by these financial institutions, thus increasing your chances of profit even more.
5. Peace of Mind
Last but not least, when you are dealing with your finances, one common expectation among all of us is to ensure our peace of mind, and an offshore bank account delivers on this like no other. Financial institutions which operate offshore bank accounts prioritize customer satisfaction at all points, thus making sure that your money is protected and growing at all times.
Along with this, most offshore bank account managers make communication with their clients a priority, thus increasing the level of satisfaction and guarantee.
Conclusion
When you are planning to open an offshore bank account, it is always better to be a year early than a minute late, as, with financial matters, things can quickly escalate out of control.
So wait no more, and contact us today at Starting Offshore for offshore banking solutions.
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