Published: 06/12/2018

At a glance

  • If you are living abroad you may well find it helpful to obtain an offshore account - especially if you would still like to maintain banking with a UK institution.
  • Offshore accounts often a require a much higher opening balance than ordinary UK bank accounts - so make sure you have enough funds before application.
  • Beware of higher banking charges with offshore accounts.

How to be savings savvy as an expat

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 the UK you may end 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 savings account without a UK address – but there are a number of additional benefits too.

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

Compare offshore savings accounts

Looking to compare offshore accounts? View today's best offshore savings rates.

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; 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 – or transfer it to a higher-paying cash ISA deal.

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 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. Just make sure to do sufficient research and seek expert advice, and you can be savings savvy wherever you are.

Disclaimer: This information is intended solely to provide guidance and is not financial advice. Moneyfacts will not be liable for any loss arising from your use or reliance on this information. If you are in any doubt, Moneyfacts recommends you obtain independent financial advice.

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At a glance

  • If you are living abroad you may well find it helpful to obtain an offshore account - especially if you would still like to maintain banking with a UK institution.
  • Offshore accounts often a require a much higher opening balance than ordinary UK bank accounts - so make sure you have enough funds before application.
  • Beware of higher banking charges with offshore accounts.

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