Whenever someone mentions offshore banking it often times sounds glamorous, as if it is a tool only used by the wealthy and powerful. That actually couldn’t be further from the truth. There are numerous reasons for holding money in an offshore bank account, and people of all income brackets have reasons to hold some of their cash in these accounts. Consider some of the benefits mentioned below.
Diversification! We hear about how we should diversify our investments all the time. This is precisely why target date funds were invented. An easy way for the novice investor to simply plug his money into a retirement fund that is actively managed and re-balanced by experts. The same holds true with cash and country risks. Holding all of your money in one currency within bank accounts located in the same country can subject you to unnecessary risks. We have seen the US dollar significantly strengthen against other currencies as of late, but it wasn’t that long ago that we experienced a near financial meltdown in the US either. In order to manage these ebbs and flows it helps to diversify your cash holdings.
Another benefit of having an offshore bank account is that you most likely will have access to investments that aren’t available within your own country. Again, this is along the same lines as diversifying your portfolio. You shouldn’t simply diversify with stocks in your home country, but abroad as well. With the global economy swaying back and forth between North American, Europe, and such, it can certainly help keep a natural hedge to the volatility of these markets.
Most offshore banks have wealth management services for those of you that need a little extra help. They can assist in creating a unique portfolio that meets your specific needs. This could include input like your desired retirement age, and the subsequent investment and cash mix needed in order to achieve those results. Private wealth management is becoming much more popular. As we watch companies globalize it only makes sense that consumers would be next to follow. It isn’t very difficult to do an internet search of some of the leading offshore banks and the services that they offer.
With most banking transactions being conducted online these days it makes sense that you only need online access to manage your offshore bank accounts. This is a huge step from those ominous offshore bank accounts of the old days. Now you can actively manage and view your portfolio with the click of a button.