An offshore bank is a place where you can save money with high interest rates and occasionally you don’t pay tax on interest.

Posted by Finlay S Bull

April 18, 2009

by Finlay S Bull

If you bank with a bank based outside your resident country then this is usually called an offshore bank. Most of the time, an offshore bank is used as a way to avoid paying taxes on savings and large sums of money - they can also be used illegally sometimes.

However, there is nothing illegal in using an offshore bank. In fact, they’re great if you want better privacy, less restrictions on your banking, and a bank that is not affected by local financial issues.The term “an offshore bank” actually originated in the UK. Banks on the Channel Islands were the first offshore banks to be used.

A lot of offshore banks are actually based just offshore on many islands throughout the world. A lot of offshore banks are situated in mainland cities such as Switzerland so not all offshore banks are strictly island based.

It isn’t always the case that you won’t pay tax on your money if it’s in an offshore bank account - this is a common misconception. You can still be taxed on money you have in an offshore bank because a lot of country’s tax laws state that all assets are subject to taxation so make sure you stick to the law.

Most major offshore bank accounts are not legally required to report their income to any tax authorities and they’re not even required to state who banks with them. A lot of people choose an offshore bank because of the stability in economy, finance and politics so they can be very useful and valid for a lot of people.

Many people decide to use an offshore bank if they feel that their area’s financial situation is going to change dramatically - now is a good time. Higher interest rates on savings accounts and fewer fees are probably the most popular reasons as to why people use an offshore bank.

An offshore bank is cheaper because the companies don’t usually have large overheads like most local banks have. As interest in an offshore bank is classed as worldwide income this usually means that you will earn interest before it’s taxed.

Not many local banks provide the services available from offshore bank accounts which is why a lot of people prefer them. Swiss bank accounts do exist and although they are very cliched in movies and books at the moment you can actually have your very own Swiss bank account.

A lot of Swiss bank accounts are anonymous which means you don’t have your name attached to it - you can simply use the account number for all transactions. If you’re interested in an offshore bank then you will be pleased to hear that there are a number of options in and around the UK.

Halifax International is one of the oldest offshore banks available or you may be interested in the Bank of Scotland International. In order to open an account you usually have to have at least 5000 GBP to start so bear this in mind if you want to open an offshore bank account.

Skipton Guernsey Limited has a great range of options available and they also have savings rates which are not taxed. An offshore bank is a competitive market which means you should find some great deals with relative ease.

If you want to enjoy the benefits of an offshore bank then you’ll need to start doing some research and preapre a deposit in the region of 5000 GBP. A lot of online guides have a huge range of information so you shouldn’t have any problem finding the services and account options that you need from your offshore bank account.

About the Author:

Writer Finlay S Bull talks about seeking out offshore banking facilities for you and your family and friends. www.capitalflex.com has high quailty information on offshore bank options, you should definitely be able to get an offer that suits you.

Personal Finance

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An offshore bank is a place where you can save money with high interest rates and occasionally you don’t pay tax on interest.

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