Regardless of what country you reside in you shouldn’t be holding all your eggs in one basket. Meaning, you shouldn’t hold all of your cash and investments within a domestic bank account. I am sure you have a retirement portfolio, and within that portfolio you most likely have a diversification of holdings in order to mitigate your risk. Bank accounts are no different. Having offshore accounts is just another tool to diversify your portfolio, and has several other benefits as well.
First and foremost is security. Many western countries have highly leveraged banking systems. These bank invest a great deal of your money on dangerous and potentially explosive derivatives. Think of the U.S. and the mortgage backed security meltdown that cause the housing, investment, and job market to collapse. Holding money in countries that are more conservative with their investments and maintain a higher level of capitalization can be an extra safety net for you money.
Currency diversification is quite an important benefit as well. We have seen the USD and EUR go back and forth over the last several years, hitting both all time highs and lows within just a few years. Holding a basket of different currencies offers a natural hedge when it comes to the ebbs and flows of global currencies.
Many international and offshore bank accounts offer higher interest. If you live in North America, chances are any savings account you hold is getting beaten up by inflation. However, some countries are still offering a high interest earning bank accounts in order to obtain foreign business.
Having money in another country is just plain smart and can provide a greater peace of mind. Consider that if you are traveling within the country of that bank account, then you have an easier access to money than drawing down on your domestic account. Perhaps an emergency medical expense arises, or you want to purchase real estate in said country, you can avoid the volatile exchange rates and regulations by having money available in that country already. Also, having your money diversified in another country can help mitigate the risk of lawsuit damages as well.
Over the years, offshore bank accounts have had a lot of negative publicity for being used for tax evasion or other illegal activities. This couldn’t be further from the truth. These accounts are actually a very fiscally responsible decision that everyone should consider.