How to be savings savvy as an expat - Offshore savings - News - Moneyfacts

News

How to be savings savvy as an expat

How to be savings savvy as an expat

Category: Offshore savings

Updated: 15/05/2014
First Published: 15/05/2014

MONEYFACTS ARCHIVE
This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

If you've decided to take the plunge and start a new life abroad, there's one key thing you need to do – make sure your finances are in order. Funding a career change in a whole new country can be costly so having suitable offshore savings arrangements is vital, helping keep you on track no matter how far from good old Blighty you've ended up.

Why have an offshore savings account?

Even though you'll want to open a current account in your adopted country to fund your day-to-day life, chances are you'll still want to maintain a link back home. Offshore accounts are the only option for expats wanting to bank with well-known UK institutions – you can't use a mainland account without a UK address – and there are a number of additional benefits too.

For starters, they can be held in a number of different currencies to help make transfers between accounts quick and simple, and they could well be more secure than in the economies where you currently reside – particularly when you consider the depositor compensation scheme of UK, Isle of Man and Channel Island institutions. You'll often get interest paid gross as well, and while you'll usually still need to pay tax of some kind, it could end up being more cost-effective than if you were to bank elsewhere.

Points to remember

  • In many cases, offshore savings accounts have more opening restrictions than their UK-based counterparts – particularly when it comes to the initial deposit. While some can be found that require an opening balance of £1 these are few and far between, and the majority will only be suitable for serious savers that can deposit a few thousand pounds or more.
  • As with onshore savings accounts, you'll need to provide proof of your identity and new address. Some accounts, particularly private banks with a high deposit requirement, will need proof of income and financial position too.
  • Keep fees in mind, as some providers charge hefty withdrawal rates (for example) which could counteract any benefit, again meaning these accounts will be more suited to those with higher balances.
  • Consider keeping an offshore account if you travel frequently, are a business professional or have property dotted around, as the ability to hold accounts in other currencies means transfers can be simple and cost-effective. Just keep an eye on exchange rates, as you could lose out if you convert currencies when rates aren't favourable.
  • You won't be able to save into a UK-based ISA while you're abroad, but in some cases (depending on your bank) you'll be able to keep your current pot untouched to benefit from compound interest. Then, when you're back in the UK, you can continue adding to it.

It's important to remember that the benefits and conditions of any offshore product will depend entirely on the account itself, your new place of residence and your individual circumstances, with the likes of tax rules differing according to country. Luckily, offshore accounts will be managed by specialists in international banking so you can be confident in getting the help you need, so make sure to do sufficient research and seek expert advice and you can be savings savvy wherever you are.

What Next?

Find the best offshore savings accounts that are based outside of the UK

Disclaimer: Information is correct as of the date of publication (shown at the top of this article). Any products featured may be withdrawn by their provider or changed at any time.

Related Articles

International money transfer – points to remember

International money transfer can be vital to the success of your work or home life abroad, but if you don’t go about it the right way, you could spend far more than you need to. So, we’ve outlined a few points to remember.

Expats suffering from low savings rates

If you thought savings rates onshore were bad, spare a thought for expats living elsewhere – because their rates are even worse.

Co-op shuts doors to offshore savers

The Co-operative Bank has come under fire from just about every angle recently, and now it’s gone and angered those who hold offshore savings accounts with them – by closing its offshore fixed and variable rate bonds.
 
Close