Offshore Banking Interest Rates
There's a wide misconception that on current accounts, offshore accounts yield higher interest rates than their onshore counterparts. Sadly, this is not usually true and both onshore and offshore banks offer the same low interest rates on current accounts. There are usually fees associated with constantly accessing funds except on checking or current accounts, which have poor interest rates most of the time, just like any other bank.
Offshore Banking was usually considered as being for the rich and famous, but International banking institutions are competitive and need to reach more customers. This resulted in offshore banking services putting together more attractive packages and reducing fees while increasing interest rates to draw in more business. They can remain flexible while offering advantages just because of the laws in the countries they are located. Those countries are usually less regulated and permit for higher levls of privacy and confidentiality. They usually have no obligation to report any client activity to governing bodies or tax authorities, but they opt to do so most of the time. There are interest rate benefits though, just in a different account type.
Savings interest rates are a whole other topic. Offshore banks usually do offer higher rates for savings accounts than their onshore competitors. This interest rate also gets better the larger the lump sum or frequency of contribution the client can commit. Longer amounts of time also increase the potential for higher interest rates. One should thread carefully and under best conditions should get qualified help when comparing offshore banking providers and looking for the best solution. That is of course after it has been established that an offshore banking account is the best option.
A lot of times, offshore banks don't pay interest on savings accounts in months when money was withdrawn. It's important therefore to take this into consideration, and if you plan on constantly withdrawing from your Offshore Account, make sure it's on that doesn't penalize for withdrawals.
It is suggested to use a combination of offshore banking accounts for the optimal returns and flexibility. Truly high interest rate offshore bank accounts are not too easy to come by, and they don't offer the flexibility of lower interest current accounts. A combination of high interest savings accounts, for long term returns, and a low interest rate current account for, accessibility to your money is probably one of the best investment package strategies for maximized profit from offshore accounts.
In jurisdictions that are not carefully regulated, high interest offshore bank accounts should be approached with caution and should be considered very risky. It's always important to carry out due diligence on offshore banking providers before committing because new companies usually offer higher rates to attract more customers.
Aside from that, it's worth window shopping for a higher interest rate because although some are risky, with the proper professional help and research, some good companies can be found. Some of the larger banking institutions offer customized account packages that combine higher rates with the customer's flexibility need.