Onshore Savings Advice is Valid for Your Offshore Savings Too

The wonderful world of offshore really isn’t so complex, and in many fundamental and important ways it isn’t so different to saving, investing or banking onshore.  Having said that, and before going any further, of course it has to be said that the argument between onshore and offshore for your own personal finances is one that you and only you can decide upon with the help and advice of a qualified adviser!

That said, some offshore savings advice is valid when it comes to your offshore savings too – and in this article we’re going to impart 10 top tips for savvy offshore saving that apply to your onshore cash deposits too.  It’s mainly about taking a commonsense approach to managing your money, and beating the banks at their own little games that otherwise see you losing out potentially.

So, if you’re an expat with your money invested offshore, this article is very much for you – however, if you’re thinking about the cash you also have onshore, or you’re thinking about one day repatriating, then this article will still be of value!

1 A Bank is Not a Charity

Banks and financial institutions are businesses in the market for making big fat profits.  And of course, as we all know, if they don’t make big fat profits they rip off the taxpayer by bribing the government into bailing them out.  So, as you can see, a bank is not a charity – therefore you shouldn’t trust them any further than their small print.  Headline rates are what they capture customers with…but the small print is what really matters.  Never lock in with anyone and into any financial product or saving solution until you know full well what you’re really getting in to!

2 You Have to Nurture Your Cash

You may find a fab savings account that’s offering you an excellent rate of interest.  You will pop your money in there and sit back and have a congratulatory cup of tea, safe as you are in the knowledge that your money is working hard for you.  But then letters will start arriving from your bank telling you about changes to the rate of interest on that account and changes to the way your money is being managed.  Whilst these letters may make you feel a little uneasy you may not want to read them too closely as it just brings up the hassle of having to worry about your money again, just when you thought you had it sussed.  However, fail to heed these warnings from the bank and you will potentially be letting your money down.  Banks and the like have a nasty habit of capturing your business with a great headline rate and then chipping away at that rate until you’re earning naff all on your money.  So don’t leave your money to the erosion effects of inflation as your interest rate fails to match it let alone beat it.

3 You Have to Nurture Your Cash Part 2

Some banks and institutions, (even onshore), don’t bother telling you if they are cutting the rate of interest on your savings.  They just do it and it is reflected in your next statement.  This is not even against the law – nice eh?  So, do your own due diligence on an ongoing basis, or find a decent financial adviser who is incentivised to keep you fully up to date on any adverse changes to the way your money is structured.  These guys will make it their business to know which institutions are offering better rates, because if you then change they will get commission.  It’s symbiosis – you get to benefit from a better rate of return, the adviser benefits from commission!

4 Utilise the Tax Efficient Savings Options Open to You

Onshore in the UK these are limited to the likes of ISAs and pension contributions – but offshore you may have access to a whole host of tax efficient saving or investing opportunities.  Offshore bonds, for example, can allow you to take an income from your investment and defer taxation which gives your pot more opportunity and weight to grow and grow!  What’s more, depending on where you live, work, save, pay tax and so on, there could be legitimate ways for you to save and invest tax-free.  Find out what you can and cannot do – and get on and beat the taxman whenever you legitimately can.

5 Reel Them In

Banks will do almost anything to attract new custom because once they have a new customer it is rare that said new customer will then go elsewhere in a hurry.  In fact, banks thrive on loyalty yet they do naff all to reward or encourage it.  They reel you in with a headline rate, they then chip away at that headline rate until they’re feeding off you and profiting from you and getting a lot more out of the deal than you are.  This goes on onshore and offshore – so stay switched on and ahead of the game.  Keep a close eye on those that hold your cash and make sure you know what they’re doing with it and how they’re rewarding you for having the use of it.  Again, this goes back to what I said about having an adviser working with you.  Yes, these guys are in it for money too, but they gain when you gain so at least the relationship is more transparent!  If you do decide to use the services of a financial adviser, make sure you pick a good one.

6 Play Banks At Their Own Game

Sure, sign up for the lovely introductory bonus – but as soon as the bank starts chipping away at it, say goodbye and take your cash on to the next bank with a lovely introductory bonus.  You need have no loyalty!

7 Don’t Be Blinded by Hype

Banks have an awful lot of (your) money to waste on advertising and they use this money to hype up and overinflate their image, standing and importance as well as the benefits of one given product over another.  Do not believe any of the hype.  The bottom lines are the interest paid and the small print you have to sign up to.  All the rest is cheap and worthless tinsel.

8 How Accessible is Your Cash

How accessible do you want your money to be?  If you’re going for a straight cash savings account for your rainy day fund you need to be able to get your hands on that money immediately without notice and without penalty.  Anything else should not be acceptable.  Make sure you are getting what you want to be getting.  Unless it is instant access you don’t want it! 

9 Demographically Targeted Accounts Are Usually Rubbish

Accounts for children, teenagers, young savers, homeowners, expats, seniors – banks will market anything at a specific demographic to make it sound more applicable to that group.  Usually however, such accounts are just designed to make you turn your head and look closer – often they are a pile of rubbish.  Forget the headlines, forget the marketing and just look at the returns and the small print.  Yes, I have said all this before – but offshore banks and onshore financial institutions will try any trick to turn your head.

10 Be Careful!

If you look at the offshore world and the onshore world you will see there are thousands and thousands of accounts for savers from hundreds of different institutions.  Most of them are rubbish!  However, the marketing of such rubbish accounts is usually very impressive.  So, you have to be very careful that you are getting the most for your money and that you’re comfortable with the terms and conditions you’re singing up to.  Finally, you need to review your financial position at least annually to make sure you’re still getting the best rate of return on your cash.