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By: Ikedi Ani-okoye

What is an Offshore Savings Account?

The first thing that comes to mind, when you think about an offshore savings accounts, is the people with a lot of money. But the fact is, an offshore account can benefit anybody, all it means is that you have an account in another country.

People who have a lot of money, too often use offshore accounts to save paying excessive tax. But, for the normal person, an offshore account can still be beneficial.

Choosing an offshore savings account, means that your money can make interest, on top of interest, at a much higher rate, and is readily available in the local high street bank. Paying tax on an offshore account, is usually annual, this means interest will grow on a compound bases.

Paying tax on any gains that you make offshore, do need to be declared, as well as those made onshore.

When the tax date comes around you need to declare to the tax authorities (HM Revenue and Customs), all your revenue, even if made elsewhere. The tax for an offshore account, is not required until 12 months is up. This means that you can compound your interest for 12 months and pay tax on the total.

When you aren't saving a lot of money monthly, an offshore savings accounts isn't ideal for you. The more money you have to put away each month, the more you can make from an offshore savings accounts. A popular high Street bank, HSBC, can offer you an offshore facility for your money. You can also find other banks which can offer you the same.