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Tax Engineering

What is an average interest rate for fixed-term offshore bank account deposits?


Question

Hello, I want to set a fixed-term deposit of 500.000 US Dollars and I want to know what is an average interest rate. In the case of 1 million dollars, how much can I gain monthly or it is more advisable to invest? Awaiting your reply, thanks.

Answer

Generally the interest rates of offshore bank account fixed-term deposits are lower than those of onshore accounts. The main reasons for that is that offshore banking is more expensive and customer service is usually more personalized. At the same time the main advantage of investing money in offshore deposits is usually tax savings since if you are not a resident in the tax haven you will not pay any taxes on generated interests.

In Bahamas, for example, the interest rates that financial institutions are offering for depositing between $ 500,000 and $ 1 Million are between 1.75% -2%. Obtaining higher or lower percentage depends on the length of the term of a deposit and how long you have been working with the financial institution.

In reference to the opening of an offshore savings bank account, keep in mind that in order to offer you the service the bank will need to verify that the money deposited in the financial institution doesn't proceed from activities related to money laundering. For this reason, the bank will request proof of source of funds, such as contracts or income tax returns.



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