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Which Country Is the Best for Offshore Banking?

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Best Country for Offshore Banking

There are a lot of places where you can do offshore banking. However, not all of them are ideal. You have to think about taxes, safety, accessibility and other factors. Plus, economies change over time, so the best country for offshore banking five years ago might not be the best country for offshore banking today.

The Swiss Bank Account

If the only things that you know about offshore banking come from the movies then chances are that you immediately think of Switzerland. The “Swiss bank account” is practically a synonym for offshore banking. But is Switzerland the best country for offshore banking today? Here’s why:

  • They have super strict privacy laws which is excellent for asset protection.
  • Switzerland’s political climate and economy are stable. They have been for a long time. They’ll likely continue to be so.
  • The banks are well-protected there so even if the economy does get shaky, there are safeguards in place for your money.
  • There are no taxes on interest, dividends, or inheritances if a Swiss company doesn’t earn profits off of them.

if you’re new to banking outside of the United States, Switzerland might be the best country for offshore banking.

What About the Caymans?

The other country you’ve probably heard about from the movies is the Cayman Islands. Why do people reference it so much? Because it’s arguably the best country for offshore banking when it comes to tax benefits. There are no taxes on payroll, income, property, corporations, or capital gains.

There are many reasons to consider offshore banking. Diversifying your money is beneficial for a lot of reasons. Tax benefits are one of the key reasons. Therefore, if that’s the reason you’re looking into offshore banking, then you definitely want to think about getting an account in the Cayman Islands.

Like Switzerland, this region is politically and economically stable. Also, you can easily exchange currencies here without fees.

Other Best Countries for Offshore Banking

Either Switzerland or the Cayman Islands would probably be the best country for offshore banking. But they aren’t the only good options. Here are some to consider:

  • Singapore is ideal if you have six figures to put into an offshore bank. The country is stable. Their banks are known for their wealth management services. And investing / trading is fairly easy here across multiple currencies.
  • Hong Kong has frequently topped the list of best offshore banking options. Due to recent instability there, you’ll want to look closely at this option. That said, it’s still a solid choice.
  • Nevis is a top choice if you’re looking to move business assets to a foreign country. They have strong asset protection services and flexible operational formats for businesses.
  • Belize is the best country for offshore banking if you’re seeking a high interest rate. There are other countries that offer higher rates but they’re also much less stable countries. If you want to grow your money, but to do so in a country that is stable and safe, go with Belize.
  • And if safety is your number one concern, you might want to look into banking in Germany.
  • If you’re more open to risk, consider offshore banking in UAE. It’s only risky because it’s a relatively new market but many people say it’s the top choice as far as emerging markets go.

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How Many Bank Accounts Should I Have? A Guide for Saving and Spending

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Nearly 94% of American households have at least one primary bank account. But are they making the most of their finances? Holding a variety of different bank accounts is one way you can better manage your money.

You might be asking yourself, “how many bank accounts should I have?” It’s a question with no clear or definitive answer. But if you know some common saving and spending strategies, you can find out which is right for you.

Not sure how to make the most of your banking experience? Here are some banking strategies that might change how you store your money.

How Many Bank Accounts Should I Have?

Optimizing your financial holdings is the key to long-term financial health. For some people, the offerings of specific bank accounts are less important than the way they’re organized.

We’ll help you decide which bank account setup is right for you, starting with the most basic of account setups: Checking and savings accounts.

Checking Accounts

If you have a bank account with any financial institution, it’s probably a checking account. In this day and age, a checking account is virtually mandatory. Your checking account covers daily expenses, bills, and occasional outings.

A single checking account gets the job done. But what if you’re married? Some couples may decide to form a joint checking account.

For others, sharing their expenses removes too much of their autonomy. The solution for these married couples is to hold a joint checking account for their shared expenses but to also have personal checking accounts for their personal expenses.

Savings Accounts

In addition to at least one checking account, everyone can benefit from the addition of a savings account. A savings account allows a limited number of transactions but has significantly higher interest rates.

Rather than piling all your money in a single checking account, you’ll generate interest by stashing your savings in a savings account.

For those who have both short-term and long-term savings plans, it might be in their best interest to open multiple savings accounts. In general, your savings account should hold an emergency fund and your retirement reserves, if you’re not ready to invest them in the market.

But also, you might be saving for a vacation, a degree, or a downpayment for a house. Consider opening a savings account for each of these different purposes.

This is known as a bucket savings strategy. At most banks, you can even schedule automatic transfers. These can help you fill different accounts without any micromanagement on your end.

Multiple Bank Accounts

Don’t forget that you can hold multiple bank accounts at different banking institutions. This is especially important for savings. Before you open your first savings account, shop around for some of the best interest rates in the market.

Business Bank Accounts

You should have a checking account separate from your personal finances if you’re a freelancer or own a personal business. This is important not only for tax purposes but can help you keep track of your business’ income and expenses. Not to mention, many banks offer specific incentives for business accounts.

A business checking account might be enough if your income is small and it’s more of a side-gig. However, if you plan on seriously expanding your business, you might want to consider a business savings account as well.

If your business relies on a storefront, you’ll also want to open a merchant services account so you can accept debit and credit cards.

Does your business rely on international customers? Search now to measure risk and financial data that could impact your company.

When Should I Open New Bank Accounts?

In addition to strategically opening new bank accounts, you might want to consider transferring banking institutions under certain circumstances.

Keep in mind that every time you open an account, your credit will take a hit from a hard credit check. Don’t open too many accounts at once if you plan on taking out a loan anytime soon.

Sign Up Bonuses

Some banks offer serious payouts for opening an account with them. It’s not worthwhile to deal with the hassle of switching accounts for the usual bonus of $100. However, sometimes you can snag a deal and receive several hundred dollars.

When you come across a massive sign up bonus, it’s worth your time to open an account. You can easily make $1000 or more in a year just by looking for bank sign up bonuses. Of course, be sure that the financial institutions you choose still offer worthwhile features before you bank with them.

Additional Banking Features

Banking has come a long way. Many banks now offer mobile banking, ATMs without fees, and more. If you feel your bank is lacking in comparison, it may be time to open an account with someone else.

So long as you have an interest rate that matches the standard, it’s generally not worth the hassle of opening a savings account at a specific bank unless it’s a massive increase. To stay competitive, most banks have nearly identical rates.

How Many Bank Accounts in Total?

“How many bank accounts should I have?” The truth is there’s no easy answer. At the very least, you should have two: a savings account and a checking account. However, if you own a business or are married, that number is likely to increase.

You might also own more savings accounts for organizational purposes, or to get the most of sign-up bonuses and banking features.

Want more personal finance advice? Check out our personal finance articles.

 

Opening Two Bank Accounts from the Same Bank

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open two bank accounts

Having multiple bank accounts can be a great financial move. It gives you options for controlling or segmenting your spending, saving toward multiple goals and keeping those amounts separate, and keeping both a joint and individual account for managing household finances. Luckily, nearly every bank will let you open two bank accounts. Not only can you set them both up when you first sign up, but you can also add a secondary account later. However, there are also risks if you use this approach. If you are considering opening two bank accounts from the same bank, here’s what you need to know.

Benefits of Opening Two Bank Accounts from the Same Bank

When you have more than one account with the same bank, you get a variety of benefits. First and foremost, it is incredibly convenient. All of your money is in one place, so you’ll have one bank to deal with if you need help. You might find that you really enjoy the customer service at one bank and want to stay with them too. States like Texas are known for their hospitality so finding your lone star bank might provide you with some of the best customer service around.

Plus, your transfers between accounts may be instantaneous, which can be helpful. For example, if your checking account is low and you have money in savings, you can shift money from your savings to your checking to handle an unexpected emergency. Potentially, the cash will move in seconds, which is great if you can’t afford to wait.

If you are considering two savings accounts, you could use each one for a different purpose. For example, one could hold your emergency fund while the other is used to build up cash for a major purchase or vacation. This can make it easier to track the purpose of your money, which is great for budgeting, too.

Risks of Keeping All of Your Money with One Financial Institution

When you have multiple accounts with one bank and don’t maintain a checking or savings account with another institution, there are some potential risks. If your bank experiences a technical issue, you might not be able to view or use any of your accounts, and that could put you in a bind. While this would certainly be a rare occurrence, it’s important to understand that it could happen.

If you have a substantial amount of money, you may also exceed the insurance limits. At banks, the Federal Deposit Insurance Corporation (FDIC) insures each account holder for up to $250,000, not each account. That means, if the total of your two accounts is above $250,000 together, you aren’t fully insured. The excess wouldn’t be covered, so you could lose it if an incident occurred.

No More Than $250K

However, if you put those two accounts in separate banks, as long as each bank holds no more than $250,000, your money is fully insured. As a result, you would be safer using more than one institution if your total savings and checking account balances would exceed that amount.

Ultimately, whether you open two accounts with the same bank or separate them by using more than one bank is a personal decision. Just make sure you are comfortable with the risks if you proceed.

Have you opened two bank accounts at the same bank? Tell us about your experience in the comments below.

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What Can You Do With A Frozen Bank Account?

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frozen bank account

Learning that your bank account is frozen is usually a shock. While you have some access to your account, a lot of your activity is restricted. This can make it incredibly challenging to manage financially, particularly if your only bank account is frozen. If you’re stuck with a frozen bank account, knowing what you can and can’t do is beneficial. Here’s a look at how a frozen bank account works.

What You Can Do When Your Bank Account is Frozen

If your bank account is frozen, there are still certain things you can do with the account. You do maintain your ability to review your transactions. Additionally, the account can accept certain kinds of deposits. However, that is the limit as to what you can do while the bank account is frozen.

What You Can’t Do When Your Account is Frozen

Once your bank account is frozen, you can’t withdraw any of your money. Additionally, you can’t transfer out any of the funds, even if it is for paying bills.

Until the account is unfrozen, your money is essentially locked away. You’ll have to address the source issue if you want to regain access to your funds.

How to Handle a Frozen Bank Account

The moment you realize your bank account is frozen, you need to call your bank. There are a few reasons why it may have frozen your account, and you can’t take action until you know which scenario is in play.

Usually, banks only freeze bank accounts for three reasons:

  • Illegal or suspicious activity
  • Unpaid debts and the creditors have court orders
  • Unpaid debts to the government

Your next steps may be determined based on the reason for the freeze. For example, if there is an unpaid debt that went to collections and that creditor is trying to access your account to collect payment, you may be able to speak with the creditor and come up with another arrangement.

However, in nearly all cases, it is wise to consult with a lawyer. Getting a bank account unfrozen can be incredibly complicated since it usually means that criminal activity is suspected, you are fighting against a court order, or you owe the government money.

Keep An Eye On Your Mail

As you work to figure out your next steps, keep an eye on your mail. Usually, you’ll be receiving a notice that will discuss whether any of the money in your account is “exempt” from the freeze. Additionally, it should contain instructions regarding what you may need to do to get the account unfrozen. By reviewing it carefully, you may be able to start a procedure that could resolve the issue with or without the help of a lawyer.

You should also review local laws and regulations regarding frozen bank accounts. In some cases, there are legal requirements regarding how much of your money has to remain unfrozen, ensuring you can handle various necessities of life. For example, the Exempt Income Protection Act in New York is one such law. Not all states have the same regulations, so you’ll need to research yours to determine what protections are available.

Should You Open Another Bank Account?

If your main bank account is frozen, opening a new account at a different bank is usually a good idea. This allows you to handle various financial basics, like deposit paychecks and pay bills. This is especially true if your pay is being directly deposited into the frozen account, as you’ll need a new place for that money to go. Similarly, if you are receiving government benefits such as Social Security, you might need a new bank account, so you can have that money deposited into a usable account.

 

Have you ever had to deal with a frozen bank account? What were you able to do with it? Share your experience in the comments below.

 

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Best Offshore Bank Accounts and Why You Need One

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best offshore banks

I confess that for a long time I never would have thought about the best offshore bank accounts. I had a mistaken image that these accounts were for super-rich people who wanted to hide their money. In fact, I figured that most of them were criminals in the vein of an American Greed episode. However, now that I’ve learned more about what offshore banking really is, I understand that anyone can benefit from using these types of bank accounts. That’s how I’ve come to wonder about which ones are the best offshore bank accounts.

What Are Offshore Bank Accounts?

As you likely know, offshore bank accounts are bank accounts that are established in a country other than the one where you reside. More specifically, it’s an account at a bank that operates under an international banking license. Many people who live in the United States do opt to open offshore banking accounts around the world.

Benefits of Offshore Banking

There are many different reasons that people choose offshore banking. Here are some of the most common benefits people seek when choosing this option:

Protect Your Money

Nomad Capitalist reports that there are 39 countries that offer safer bank accounts than the United States does. If something goes awry here politically and/or economically, your money could be at risk. Theoretically, it’s protected, of course, if it’s FDIC insured. Nevertheless, you don’t want to be caught with your pants down when it comes to large sums of money. Putting some of your money in offshore bank accounts can help protect you from problems with the government and/or the American banks that you use.

Diversify Your Accounts and Your Currency

You don’t want to put all of your money in one account. In fact, you shouldn’t even keep all of your money in one currency. By saving your funds in multiple currencies, you protect yourself against a variety of changes in the global economy. The best offshore bank accounts offer the opportunity to utilize several different currencies and to easily transfer funds from one currency to another.

Earn More Interest

The best offshore bank accounts also offer very high-interest rates on your savings. Therefore, if you want to maximize the money that you earn in interest, you should explore your offshore options. Make sure that you do your research and understand all fees as you work to make the most of your money.

More Reasons You Need an Offshore Bank Account

International Man suggests these additional benefits:

  • It gives you financial freedom compared to tethering yourself to one country’s banking system.
  • It can give you access to medical care abroad just in case you need it.
  • Generally speaking, it helps with banking as an expat/tourist.
  • Acting now can help you make the most of your money in the future.

Of course, you want to keep your regular American bank accounts. But if you have extra money besides what you need in your immediate checking and savings account, then you might want to think about looking into the best offshore bank accounts.

Where Are the Best Offshore Bank Accounts?

You can open an offshore bank account almost anywhere. However, each country has its own rules when it comes to banking. Moreover, the United States has its own banking rules that you must understand if you engage in offshore banking. Depending on your specific needs, certain countries will offer better options than others. That said, some of the best offshore bank accounts are located in:

  • Belize, which has high-interest rates and 24 percent required liquidity; note that this one is controversial because of a poor reputation and should be considered carefully, weighing all pros and cons
  • Georgia, which Nomad Capitalist says is the easiest place to bank in and has good interest rates
  • Germany, which is widely recognized as one of the safest banking systems in the world
  • Hong Kong, which Sovereign Man ranks number one
  • Singapore, which has monetary stability and top financial advisors at their banks
  • South Korea, which has good business banking options
  • Switzerland, which leads the way in financial privacy
  • UAE, which is emerging as a strong new market for offshore banking

Generally speaking, the best offshore bank accounts are located in areas that are financially stable, don’t face a lot of US pressure for compliance, and have laws that are pro-business. Note that some countries (such as Sweden and France) have very safe banks but also have some drawbacks such as very high taxes.

What Are the Best Offshore Bank Accounts?

The best offshore bank accounts are located in countries where they are required to keep a lot of cash on hand (which isn’t the case with the United States, by the way). You want to choose a bank that offers good customer service, is relatively easy to bank with as a foreigner, and has terms you like (such as a high-interest rate.)

Here are some of the best offshore bank accounts to consider in 2019.

 

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What Bank Account Should I Use?

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What Bank Account Should I Use

Choosing a bank account can be a difficult decision. Whether you are opening a checking account for the first time or this is a second account, it can be a little nerve wrecking. There are certain things everyone should be looking for in a bank account when they go to open a new one, but sometimes you get too flustered with the start-up process.

You may have a lot of questions, you may wonder if this account is the right one for you. What, if any, fees will you incur when opening the new account? Can you afford the initial “start-up” if they have minimums? Here are a few things to keep in mind when opening a new bank account:

No Monthly Fees

Scout a banking account that does not have a monthly fee. Some banks charge their customers as much as $10 a month just to keep their accounts up and running. Some accounts allow their users to avoid these fees if they keep a certain amount across all of their accounts held with the company (checking, savings, retirement, etc.). However, it is important to have your money in separate accounts (at separate banks) for a few reasons. If your bank is hacked, you could lose everything. Also, having your savings at a separate bank removes some of the temptation to spend.

No Limitations

Be sure there is no limit to the number of transactions that you can have each month. Some accounts will only allow a certain amount, so at Christmas time, your debit card could stop working because you’ve reached your transaction limit (but it is only Dec. 10). You should also be sure that you are able to withdraw and deposit money freely into your accounts as well as transfer between savings and checking without incurring fees.

Online and Mobile Access

Having online AND mobile access has become increasingly important when searching for the right bank account. Being able to access your account information on-the-go is a must in this fast-paced world. While most accounts offer this, there are some smaller, private banks that do not, so be sure if this is important to you, that the account is accessible on-the-go.

Overdraft Protection

While over drafting in any account is not recommended, you will not incur any fees by simply keeping a healthy account balance and keeping an eye on your expenses. However, linking your checking and savings account may also prevent overdraft fees. If you link the two and your checking account does not have enough for a transaction, the bank will transfer money from savings to checking. Typically, there is a charge for this, but it is much less than the $35 you will incur for overdraft.

If you are living paycheck to paycheck, overdraft protection may be a good idea. If there is no money in your savings, overdraft protection can help. However, be sure if you opt for the protection that the fees are low and that you will not incur more fees than you would if you just went without the protection altogether.

There are a lot of things to think about when opening a new account, but thinking ahead and knowing what questions to ask is half the battle. By knowing what to look for, you can find the perfect account.

Photo: Flickr: GotCredit