Offshore Saving Accounts Q & A's
What are offshore savings accounts?
Offshore savings accounts are a type of financial product held in a bank which is based in an offshore jurisdiction, such as the Crown Dependencies of Guernsey, Jersey and the Isle of Man. Some banks allow customers to hold their funds in their own name (personal account) or in a company name (corporate account).
Offshore Accounts may be provided as long term savings accounts or current accounts in a variety of currencies, although most commonly in Sterling, Euro and US Dollar.
Are offshore accounts legal?
Yes. If you follow the correct procedures it is perfectly legal to hold your savings in offshore accounts, and can be beneficial in helping you meet your savings goals.
It is a legal requirement to declare your income whether you hold your funds onshore or offshore. In an age of transparency, with initiatives such as Tax Information Exchange Agreements, OECD Common Reporting Standard and US Foreign Account Tax Compliance Act, banks and tax authorities are now working closely together.
Who can open an offshore savings account?
If you meet the terms and conditions of the offshore bank you are applying to, you can open an account from 18 years old. Most banks will also ask you to provide documentation to prove your identity and residence. Skipton International (Skipton) requests the following:
Proof of Identity - certified copy of your passport or driving license
Proof of address - certified copy or your original bank statement or utility bill (no more than 3 months old)
Some banks, including Skipton, will also ask you for a declaration of source of funds.
Failure to provide any of the above documentation could result in your application being delayed or even declined. To prevent this from happening, take a look at page 4 of our Application Form and ensure you have all the necessary documents and that they are certified correctly.
What is the minimum amount to open an offshore savings account?
Different banks have different minimum balance requirements. With Skipton a minimum deposit of £10,000 is required, whereas other offshore banks allow you to open an account with as little as £1. Generally the more funds you hold in the account the greater return you will receive. On the contrary, other offshore account providers can require a minimum opening balance of £100,000 or more, depending upon the type of customer they are targeting (e.g. High Net Worth individuals).
Why might you open an offshore saving account?
- You are a retired British Expatriate and have sterling savings which you would like to invest. However, being resident overseas most UK banks and Building Societies will not allow you to open a new savings account. Skipton International support British expatriates in over 100 countries.
- You are not a British Citizen and have acquired wealth in sterling, possibly through inheritance, investment or even working in a Sterling economy, but are now resident outside of the UK. An Offshore Bank may possibly be able to support your savings needs.
- You are an expatriate worker and tend to move countries periodically. Having offshore saving accounts holding your savings in an independent location may be more convenient than attempting to open and close savings accounts with each change of residence.
- You are resident in a jurisdiction that is considered offshore, so a local Offshore Bank may be conveniently located.
Many Skipton customers appreciate the personal service they receive from an English speaking offshore Bank, licensed in the highly regarded and well regulated jurisdiction of Guernsey.
How often do you have to visit the bank your offshore account is with?
Never. At Skipton International you can send your Application and supporting documentation via post. Many banks including Skipton offer telephone banking, which means you can control your account over the phone. This facility enables you to:
- Check account balances
- Funds can be paid away to a nominated bank account
- Money can be transferred internally to new and existing accounts
- Funds can be placed on notice
- Bank statements can be ordered
Many banks will also offer an internet banking facility.
How long does it take to open an offshore account?
- After the application has been received, the account will be open in 2-3 working days
- A statement and letter confirming your new account number will be sent out the following day. However, should you wish to know your details sooner the Customer Services team will happily assist between the hours of 8.30am – 5.30pm (UK time).
- If the application is incomplete or any documentation is missing, the account cannot be opened until the outstanding items are received.
Do you have to travel overseas to bank offshore?
No, just because your account is held overseas does not mean you have to travel there. Many banks allow you to operate your savings accounts by post, telephone and the internet.
Who might open an offshore savings account?
- People who want offshore savings or offshore earnings predominantly in sterling
- People looking to acquire wealth whilst working as an expatriate or obtaining an income from prior savings whilst enjoying a well earned retirement overseas
- Resident in an offshore jurisdiction, particularly the Crown Dependencies of Guernsey, Jersey and the Isle of Man
- British Exapts, resident overseas, but require their UK Sterling pension paid into a UK payment zone bank account.
Can I have multiple savings accounts?
As long as each of your account holds the minimum balance requirements, you can open as many offshore savings accounts as you wish, subject to not exceeding the maximum limit per client. Many customers choose not to keep all their eggs in one basket and spread their funds around various institutions and accounts.
The types of savings accounts offered by banks.
Bonds - these tend to earn a higher rate of interest and if you do not need access to the capital, they are a worthwhile investment. Your funds will be tied up for the duration of the bond with no access.
Notice accounts – these accounts are often variable rates of interest, which means they can either go up or down depending. Should you wish to withdraw your funds, you will need to serve the set notice period.
Easy access – your funds are available immediately if you keep your funds in an easy access account. If you feel like you may need access to your funds then this account would make financial sense.