Uneasy Access to Your Money

Many offshore banks only allow international customers to access their deposits by making transfers. Sometimes this can take days and a fee could be included. Of course, that does not apply to all foreign banks as some have developed great services and products such as debit cards, checks, internet banking and made them available to both domestic and foreign account holders. You wouldn’t want to be in a situation where you would need to access your offshore account urgently and be unable to do so because you didn’t do your research properly before you opened an account in a certain bank abroad.

Insecurity

Another very important reason to be extremely careful when you pick an offshore bank to keep your money in is the level of security it provides in case of a financial crisis. A number of foreign banks will not guarantee the reimbursement of any deposits over a certain amount outlined in your account contract. In practice, this means that if the bank goes bankrupt you may lose all the money exceeding the limit the bank agreed to cover. To give you a clearer notion of what your loss may be, banks in the U.S. normally have the protected deposit limit set to $250,000. In offshore banks, this is much less and in some, you may not be able to recover any of the money you’ve deposited.

There is an easy prevention of an unpleasant situation like that – making sure you have all the relevant information about the places you are considering for offshore banking and doing your due diligence before opening an account. One of the first steps would be reading our post about the Top 5 Safest Offshore Banking Jurisdictions. To be completely sure you are making the right choice, though, we recommend contacting a qualified financial advisor who will have all the information you need to protect yourself and your money.

For US Citizens holding financial assets in offshore accounts, they need to report them to the IRS. If the balance is over $10,000.00 they need to file the FBAR report. If the balance is over$ 50,000 they need to file and report under FATCA.

Readers should note that this article is only intended to convey general information on these issues and that FAS CPA & Consultants (FAS) in no way intends for the contents of this article to be construed as accounting, business, financial, investment, legal, tax, or other professional advice or services.  This article cannot serve as a substitute for such professional services or advice.  Any decision or action that may affect the reader’s business should not rely solely on the contents of this article, but should rather be consulted on with a qualified professional adviser. FAS shall not be responsible for any loss sustained by any person who relies on this presentation.  This article is subject to change at any time and for any reason.