Offshore Saving Account

The advantages of saving offshore are numerous and the actual benefits achievable are accessible by many.  It’s not just expatriates or high net worth individuals seeking diversification or asset protection who can benefit from an offshore saving account either…

This article examines the general benefits of an offshore saving account and examines who can benefit most from the offshore savings plans available.

The most obvious advantage of an offshore saving account is the fact that interest payments are made gross - i.e., without the deduction of income tax. 

Few people know that even UK residents can benefit from this particular advantage of an offshore saving account because although UK residents will ultimately have to declare the income earned from interest on their Inland Revenue self assessment form, they can defer payment of taxation due. 

This is of benefit to those who save large amounts and therefore receive larger interest payments; this is because the gross interest payments roll up into a substantial amount without the deduction of taxation at source and this results in a larger final payout than would have been possible if interest was paid after the deduction of income tax.

Another advantage offered by the majority of good offshore savings accounts is the fact that they are multi currency allowing an expatriate who has business interests or bank accounts in more than one country and in more than one currency for example, to make payment into the account in a range of currencies and even draw down from the account in multiple currencies if necessary.

The fact that certain simple offshore savings accounts allow for unlimited access to funds and account information no matter where in the world the account holder is and no matter what time zone they are in currently is a further advantage that could suit the international executive who travels frequently and requires account status information or even the transfer of funds immediately for example.

Some types of offshore saving account offer higher rates of interest than their onshore equivalent - although those that do tend to require large minimum account balances and a notice period for withdrawal.  It is definitely worth looking around at all the major financial institutions with an offshore presence like HSBC Offshore, Standard Bank Offshore and Abbey International and then comparing their offshore saving account structures with those offered by private banking institutions and even domestic banks. 

You will know what your savings objectives are and how much you’re planning on putting away and for how long so you should compare savings products based on your own requirements of such an account.  An independent financial adviser with offshore focus will also be able to help you find the right offshore saving account for you.