Look abroad to give your savings a boost
International savings accounts offer favourable benefits if your focus is on growing your wealth and creating a legacy
What is an international account?
Your funds are located outside of your country of residence, in an international bank, and enable you to transact and save in a range of major currencies, including dollars and pounds whilst receiving any applicable interest gross. Depending on your country of residence, you might be subject to certain exchange control regulations.
When looking for a home for your savings, it is important to consider highly regulated jurisdictions, such as the UK Crown dependencies in the Channel Islands and Isle of Man. The requirements and regulations differ according to each jurisdiction. As a rule, they offer stability, security, financial and legal advantages, as well as potential tax efficiencies.
Benefits of an international savings account
An international savings account is worth considering for people who work or live abroad, regularly travel overseas, have family studying abroad or aim to retire in another country.
Unlike domestic savings accounts, these provide flexibility and allow easy access to foreign exchange. This can be a greatly beneficial, particularly if your domestic currency is volatile, or is likely to depreciate.
Once you have an international account, you can invest in multiple financial institutions and use it as a base for onward investment, for example to purchase an investment property or benefit from international fund solutions. You can also use it to receive income and make worldwide payments to settle bills and other expenses you might have outside your home country.
Types of international savings accounts
Generally, these are multi-currency current accounts, usually in at least the three major currencies –sterling, US dollars and euros. Some also offer additional currencies like the AUD dollar, Japanese Yen and Swiss Franc.
International accounts offer both fixed and variable interest rates, depending on your savings needs.
Should you not require access to your money for a certain period of time – usually between one and five years – you can opt for a fixed interest rate. Longer term deposits usually yield higher rates of interest on your savings. It can be helpful for tax planning to have interest capitalised and paid at maturity.
For easier access to your money, you can opt for a variable interest rate.
How to open an international savings account
The rules and procedures for opening international bank accounts will vary between banks and banking systems.
These accounts tend to be surrounded by a lot mystery, but it is relatively simple to open an account. In general, you will need to provide the bank with your personal information, such as name, date of birth, address, citizenship and occupation, along with copies of your passport, driver's licence or other identity verification documents.
There are strict checks in place and you will also have to provide additional information such as how you intend to use the account and details of your overall wealth.
This due diligence is an essential part of banking in a well-regulated jurisdiction.
It’s important to research the various options available to you, and to choose the best currency for your particular needs. You will also have to determine which type of account offers the best deposit and withdrawal functions or returns for you requirements