For many people the concept of 'offshore' is something clandestine, available only to the excessively wealthy or those seeking to evade taxation. In reality 'offshore' as a financial concept simply means placing money, wealth or assets in a country other than the one in which you live.
Naturally enough those high net worth individuals who place money offshore usually do so to take advantage of the favorable tax regimes available in so called tax havens – but even for the likes of you and me there are advantages to the offshore world that we can all benefit from.
For example – offshore savings accounts are a type of simple savings vehicle that can allow any of us to either save a regular monthly amount or a lump sum, earn higher rates of interest from some offshore providers than we could if we saved 'onshore' with the local bank – and what's more, we can earn our interest gross and only pay tax on it once annually which allows for extra compound growth in the interim which can give our savings a little extra boost.
Yes, I did mention paying tax …
Most of us still have to pay tax on any income or gain that we derive even from investments or savings that are placed offshore.
We are under an obligation to tell our local tax authority about any offshore savings accounts we have when we make our annual declaration to the IRS or HM Revenue and Customs. But because taxation is not deducted at source on the majority of offshore savings accounts we have up to a whole twelve months of compound interest giving our savings even greater growth power which makes saving offshore advantageous even when we absolutely do have to pay tax on the gains we derive from our savings.
The offshore savings accounts that offer the highest rates of interest are available to those in a position to regularly save large amounts monthly.
Basically the more you can afford to save the higher the rate of interest you will be given, the higher the rate of interest the greater the compound growth you can earn and the harder your money will work for you.
A number of leading international banking providers offer offshore savings accounts that are easily accessible and secure. For example HSBC is one global brand that most people are familiar with – you can open an account with HSBC offshore from a high street branch and then have full access to your account and growth statistics online so whenever you want making it so simple to open an offshore account and even more simple to keep an eye on it.
Gone are the days when saving and investing offshore was complicated, clandestine and the realm of the super rich or the super criminal – and we herald the arrival of an accessible concept of offshore from which we are all welcome to benefit.