Foundations of Finance

For example: Do you need an offshore bank account? What is the difference between a multi-currency account and multiple currency accounts? Can I still access my online brokerage account from overseas?

Bank Accounts and ATM Cash Withdrawals

Bill and Mary are starting out on their journey with a few accounts at banks in their home country, the USA. Like most couples, they have a couple of joint checking accounts, a savings account, a credit union account and a few credit cards.

It’s certainly worth keeping these home country accounts.

US bank accounts will also be useful for paying bills at home. Regular income like social security checks can be direct deposited into the US checking account.

o Daily cash withdrawal limit imposed by the bank that issues the card

o Daily purchase limit imposed by the bank that issues the card – this applies to non-cash purchases, where you sign a card purchase voucher in a retailer.

o Daily cash withdrawal limit imposed by the ATM network owner – this limit is not set by your bank, but by the owner of the actual cash machine where you are conducting the transaction.

That is to say, you can ask the bank that issues your card for a permanent or temporary increase in your cash withdrawal limit. Argentina and other countries place similar restrictions on ATM withdrawals.

In some countries each bank has a different network. It doesm’t matter that the card issuer allows you to withdraw $50,000.

Internet Purchases and Credit Cards

If your bank doesn’t know you are abroad, the software will most likely prevent you from suddenly spending $500 in Panama. Although your bank might be happy to mail statements to a foreign address, about 99% of online retailers are not set up to handle US cards with non-US billing addresses. Their systems will automatically detect from the card number that the card is issued in the US, then the same system will require an AVS (Address Verification System) match.

Opening a Local Bank Account

Bank account opening procedures vary enormously from country to country. Unless you are moving to a known ‘tax haven’ the banking system will probably be geared towards locals, and you might find that you have to demonstrate official residence by means of a permit or local ID card before you are even allowed to open a local bank account. If your home bank says they want to address a reference to a specific bank, explain that you are travelling and are planning to buy property overseas, but you don’t yet know in which country you will end up.

If there’s anything you don’t understand, ask your bank.

Do you need a Private Offshore Bank Account?

Banking services vary widely, but are rarely of very high quality. You should probably therefore consider opening an account at an offshore bank that specializes in dealing with non-residents. Big names like Barclays Wealth and HSBC offer these services, as do a multitude of smaller banks. You can then operate the account using internet banking and debit or credit cards.

The second is for privacy and asset protection – offshore banks offer confidentiality and discretion.

One of the convenient services most offshore banks offer expats is the multi-currency bank account. This allows you to keep various currencies in the same account.

Another consideration when opening your offshore account is whether to open a personal or corporate account.

If you would like to open a private or company offshore bank account, there are consultants who can help you.

A separate brokerage account is usually a good idea too, since most online offshore banks do not offer great brokerage facilities.

Expat Banking – Personal Finance For the Intrepid Investor

It is worth noting that often the FD’s best decisions (and sometimes worst!) is the selection of the accounting team. Painting the Picture

An FD needs to understand what the information and communication needs of his management team are and adapt his/her message accordingly.;