Living abroad changes how you bank. Your money often lands in one currency, your bills need paying in another and you still want a decent return without losing it all to conversion fees. That’s the beauty of expat savings accounts, sometimes called offshore or international savings. Below, we explore how they work, what they really cost, how to pick the right one and the traps to avoid.
What an expat savings account is (and isn’t)
An expat savings account is a savings vehicle designed for expats, non-residents or internationally mobile customers and supports multi-currency balances, offering interest rates that more than compete with domestic accounts.
If you’re on a temporary assignment, working remotely for a foreign company or retired abroad, the best expat savings account can help you separate and keep track of the currencies across your ‘domestic’ and ‘host’ finances, reducing the hassle of conversions and grow your savings.
These products can come in two main formats:
- Traditional Bank Accounts, that unfortunately offer basic legislative interest rates
- Fixed rate products that offer higher rates of interest and usually have a fixed term
How these accounts work
The first step to opening an international high yield savings account is to verify your identity using a passport, proof of address (sometimes both your current and home addresses) and proof of funds. Once approved, you can either set up a single-currency or a multi-currency savings account that lets you hold say, EUR, USD and GBP side by side. Funding the account is straightforward; it merely needs you to choose your product provider and using the above documentation, apply for the Account that suits you the best.
Providers often categorise their accounts by the type of access: instant access (withdraw anytime, lower rate), notice (commit to 30–120 days’ notice for a higher rate), and term deposits (lock funds for a fixed period to earn the top headline rates). For example, mybestbuysavings offers international savings accounts with interest rates starting from 9% and terms starting from 12 months. Moving money between your own currency ‘pots’ or sending funds from abroad is simple.
Security and jurisdiction
The safety of your high yield savings account will depend upon where it is domiciled, which will dictate the jurisdiction it will fall under. In some cases, these types of savings accounts are covered by a guarantee scheme, such as the UK’s Financial Services Compensation Scheme (FSCS) that covers eligible deposits up to a stated cap per institution (currently capped at £85,000); EU countries also run similar schemes. However, in the case of offshore/expat designed products, the level of protection can differ, so it is crucial to do your due diligence on how risk is gauged.
Looking at the criteria, it is prudent to look at past performance, service records and longevity of the company you are looking to choose. Other due diligence methods include, any accolades they have (independent awards), endorsements (celebrity endorsement is a strong candidate) openness of processes (a YouTube channel or alike) and genuine ratings from customers (Trustpilot for example).
Costs that make or break your returns
It is possible that two customers can earn the same rate of interest but walk away with very different net returns. The main culprits are set up fees, ongoing management costs, Adviser fees etc. Many Financial Advisers will charge advisory fees or commissions that decrease net returns, whereas reputable Brokers tend not to. A simple way to think about it: Net return is calculated as: Interest earned less FX costs, transfer fees, account fees, commissions and potential penalties.
Choosing the best international saving account (without the guesswork)
Choose which currency best suits you. If your cash needs are unpredictable, keep your emergency funds in an instant access account and park the rest in a notice account that rewards a longer commitment. If you are looking at longer horizons, you could build a term-deposit ladder, splitting savings across 12 months, 18 months etc, which means that your ‘pots’ will mature regularly, rather than waiting many years for a single maturity. It’s also important that your savings interest statement aligns with your tax residency obligations, so choosing a provider that pays gross interest is favourable.
mybestbuysavings final word
The best expat savings accounts blend competitive international savings rates with a solid risk strategy. This doesn’t mean it needs to be backed by a governmental scheme, but proves a risk mitigated, robust process. Match the product to your specific financial timeline to achieve the right mix of flexibility, yield and term for maximum returns.
Visit mybestbuysavings today for more information and see how their product offerings aligned with the points above. Visit their website and listen to what mybestbuysavings Ambassador, Oz Clarke has to say.
To speak to them, email at info@mybestbuysavings.com, call +44 (0) 1243 767 664 or visit the website www.mybestbuysavings.com
We hope you have found this article educational and helpful…
The mybestbuysavings Team.
