10 Reasons Why You Need an Offshore Bank Account Today
10 Reasons Why You Need an Offshore Bank Account Today by Nick Giambruno for International Man
You may have wondered: “What can an offshore bank account give me that an account at Bank of America can’t?”
The answer is: A wide range of benefits you absolutely need.
An offshore (or foreign) bank account is simply a bank account you have outside of your country of residence.
Here are the top 10 reasons why you should open one now.
Reason #1: Dilute Your Political Risk
Today, the biggest threat to your savings isn’t market risk. It’s your own government.
There’s no doubt government poses an increasing risk to your savings. Governments are sinking hopelessly deeper into insolvency. Predictably, they are turning to the same desperate measures they’ve used throughout history.
It’s only prudent to expect more bail-ins (as we’ve seen in Cyprus), bank deposit taxes (as we’ve seen in Spain), retirement savings nationalizations (as we’ve seen in Poland, Hungary, Portugal, and Argentina), and capital controls (as we’ve seen in Cyprus and Iceland), among other destructive actions. And these are just a few recent examples.
If you think these kinds of things can’t happen in your country, think again.
According to Judge Andrew Napolitano:
…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.
A big part of any strategy to reduce your political risk is to place some of your savings outside of the immediate reach of thieving bureaucrats in your home country. Setting up a foreign bank account in the right jurisdiction is a convenient way to do just that.
That way your home government can’t easily confiscate, freeze, or devalue all of your money with a couple of taps on the keyboard. If your home government imposes capital controls, an offshore bank account would help ensure you could access your money when you need it most.
In short, keeping some of your savings in the right foreign bank can largely protect you from madness in your home country.
Reason #2: Sounder Banking Systems and Banks
Almost all of the banking systems in Western countries are fundamentally unsound. They’ve leveraged themselves to the hilt. The promises of insolvent governments are all that back them. Worse, most of these banks only keep a tiny bit of cash on hand to meet customer withdrawal requests. This means, in the event of another Lehman-style financial shock, you could have trouble accessing your money.
Many people put more thought into what reality show they are going to watch on TV tonight than which bank they choose to be custodians of their savings. Many don’t even realize they have other practical options.
There are banks in stable jurisdictions with low debt that don’t gamble with customer deposits (i.e. your money). Many of these banks are much better capitalized, keep more cash on hand, and are otherwise much more conservatively run than those in the U.S.
These offshore banks are almost always more responsible custodians of your hard earned savings.
Reason #3: Asset Protection
Maybe you think it’s just other people who live on the lawsuit firing line…and you live somewhere else. Think again.
The Legal Resource Network reports that 15 million lawsuits are filed in the U.S. every year.
That works out to a new lawsuit for one out of every 12 adults each year…year after year. Unless you’re exceptionally lucky, sooner or later your turn will come. You’re not going to like it.
It’s no fluke that 80% of the world’s lawyers, over 1.2 million of them, work in the U.S. That’s where the action is. Your money is the trophy they’re competing for.
While there is no such thing as 100% protection, a foreign bank account can help make you a less attractive target.
An offshore bank account also protects you from overzealous government agencies armed with the summary power to freeze your assets. That’s because their reach doesn’t extend beyond the U.S.
If you ever find yourself in a wrestling match with a government agency or a frivolous lawsuit, a foreign bank account give you resources you can count on.
Reason #4: Currency Diversification
Holding foreign currencies is a great way to diversify your portfolio risk, protect your purchasing power, and internationalize some of your savings.
Chances are, though, your domestic bank offers few, if any, options for holding foreign currencies.
Offshore banks, on the other hand, commonly offer convenient online platforms for holding foreign currencies.
Reason #5: Higher Interest Rates for Your Deposits
In what amounts to a war on savers, the European Central Bank and the Fed have manipulated interest rates to near historic lows. These artificially low interest rates effectively transfer wealth away from savers, who would otherwise enjoy higher returns on their deposits, to borrowers.