Clients often ask what are the principal differences between Offshore Bank Accounts and Offshore Brokerage Accounts?
Offshore bank accounts (corporate or personal) are held by banks. They offer traditional banking services which make it more convenient to utilize the assets held in the accounts for purposes like everyday spending, receipt and distribution of funds. They usually offer online internet banking and debit/credit card facilities.
Offshore brokerage or trading accounts on the other hand are administered by private investment firms. The main advantage of offshore trading accounts when compared to bank accounts is that besides being able to hold cash in multiple currencies, they can also hold and transact in stocks, instantly and online. You can also buy any number of other types of investments including bonds, mutual funds, derivatives and commodities. They do as such offer greater flexibility in terms of providing access to a wider range of investments.
Like an offshore bank account, the brokerage account will typically offer services to allow investors to access their money such as wire transfers and/or issuing of bank drafts. They may also pay interest on cash balances and/or offer access to money market funds in several currencies, which usually offer better yields than holding plain cash.
However, trading accounts are not intended to be used for day-to-day banking transactions. Funds received in such accounts are expected to be used for investment purposes within the account. There may be restrictions on the frequency of funds transfers, particularly when it comes to third party payments.
If you would like more information we recommend you download Peter Macgarlane’s Practical Offshore Banking Guide 2008 – more info here:https://www.qwealthreport.com/offshore_banking_guide_2008.php
Syndicated courtesy of www.petermacfarlane.net
(C) 2008 Peter Macfarlane & Associates S.A.