titleOffshore Banking - Extra Services Private Banks Offer That You Never Knew Existed!/titlepProducts offered by banks around the world are broadly the same, though they often go under different names. However, there are products you might come across in the offshore arena that you may not be entirely familiar with. In fact, you may not have known that such wondrous possibilities existed! Here are a few definitions and explanations./ppustrongSafe Deposit Boxes/strong/u/ppA safe deposit box is a locked box reserved for you in the vault of your bank. Its a place where you can keep small, high-value items. People typically use safe deposit boxes for documents such as physical stocks or bonds, or for small, high value goods that they want to keep safe… like valuable coins, jewelry or maybe a stash of microchips. You might keep these items for pure investment purposes - say gold bullion or uncut rough diamonds - or for more sentimental reasons (your great-grandmothers wedding jewelry for example)./ppTypically you will keep the keys to the box, while the bank controls access to the vault where all the boxes are located. Normally the bank does not keep a duplicate key… so if you lose the key you will have to pay for a specialist locksmith to come in and break open the box, then youll have to buy the bank a new box too. Needless to say this is expensive, so do take care of your keys!/ppustrong/ppMulti-Currency Accounts vs. Multiple Currency Accounts/strong/u/ppDifferent banks (and different countries) maintain different accounting systems./ppemMulti-currency accounts/em are quite common in offshore banks. These are very flexible in that they allow you to keep many different currencies in the same account. You have just one account number, but when you look at your statement on the internet you will see different balances… X amount of US dollars, Y amount of Euros etc. If you send a transfer to a multi-currency account, the bank will typically keep the deposit in the currency received, rather than converting it to any particular default currency./ppOther banks also allow you to hold balances in different currencies, but operate on a different system - a separate account number for each currency. This means that, if you wish to operate in a number of different currencies, you need to maintain multiple accounts. The net result is basically the same, but you will have a series of account numbers and you must take care not to confuse them. For example, if you send US dollars to the Euro account number, the bank will assume you want to convert that balance to Euros and will do so without informing you./ppustrong/ppPrecious Metals Storage/strong/u/ppMany prudent investors have invested in assets like gold and silver and have made huge returns on their money over the past few years as commodity prices have shot through the roof. Perhaps strangely, however, if you ask the average banker how to buy gold, they dont know - so they will tell you it is not a good investment. Sometimes it pays to be insistent!/ppSome banks offer a basic service where you can buy gold and simply store it in your safe deposit box. This certainly works, but may not be the most practical way of handling it. Why? Because each time you want to buy or sell, you have to visit the bank personally. Only you have access to your box. Fine if its around the corner, but not if its around the world./ppThere are various other practical ways of buying gold such as Perth Mint Certificates or Exchange Traded Funds, but the security of such investments in the current financial climate is debatable. There is really no substitute for cold, hard gold in a secret secure vault!/ppHowever for the purposes of this article and understanding offshore banking products generally, suffice to say its important to understand the difference between allocated storage, and unallocated - also known as pooled storage. Both these systems are used by private offshore banks./ppAllocated means that a certain piece of metal (specific gold bars, coins or whatever) belongs to you. The metals are stored in the banks general vault, rather than in a specific safe deposit boxes, but they are specifically allocated as your assets. For practical purposes, therefore, you can instruct the bank to buy and sell on your behalf without you having to travel there./ppUnallocated or pooled storage means that the bank simply has X amount of gold in its vault, and allocates so many grams, ounces or kilos to your account as part of a book-keeping exercise. But the banker cannot in this case take you down to the vault and point out your specific gold bar. Again you can instruct the bank to buy and sell on your behalf./ppAllocated storage of course is better, but pooled storage tends to work out a lot cheaper in terms of the actual fees the bank charges for taking care of the metals in its vault./ppustrongNumbered Accounts/strong/u/ppNumbered accounts (or empseudonymous accounts/em, which are the same but are known by code words instead of numbers) are not all that different from normal bank accounts. The usual account records, such as statements and what regular bank staff can see in their computers, omit reference to the customers name or other identifying information, replacing it with a code number or the pseudonym. The relationship between the code number or pseudonym and the actual customer is known only to a few senior managers within the bank./ppIt is important to emphasize that the bank has an obligation to know the true identity of both the account holder and its beneficial owner. There is no such thing as an anonymous account./ppTypically the way numbered accounts work these days is that you will have a numbered account and a regular account in the same bank. Numbered accounts cannot normally be used for regular transactions such as wire transfers or checking. So when you want to make a deposit or withdrawal, your private banker will personally carry out a cash transaction at the counter between the two accounts. In the accounting records, the transaction will appear on your personal account as a cash deposit or withdrawal, so there will be no direct link to your numbered account./ppOf course, within reason and subject to normal limits, you can carry out cash transactions directly on the numbered account./ppstrongu/ppBrokerage Accounts/u/strong/ppA regular bank or cash account is simply used for depositing and transacting in a currency such as pounds, dollars or francs. Your brokerage account, however, can be used for buying stocks, funds and other investments on the world markets. The brokerage account may be stand-alone, or may be linked to your offshore bank account in the same institution. Either way, you will typically have to transfer funds from the cash account to the brokerage account before you can buy stocks./ppustrongOffshore Credit and Debit Cards/strong/u/ppAlmost all offshore banks will offer you the option of linking some kind of plastic payment card to your account. This may be anything from an unbranded hole-in-the-wall cash card through to a premium travel and entertainment card like the Platinum American Express or Diners Club cards. The most common brands, of course, are Visa and MasterCard, and there are even more variations on these cards than there are banks in the world!/ppYou personal banker will be happy to explain the range of cards available and what are the principal differences between products like emdebit cards, deferred debit cards, secured credit cards/em and so on./ppWhat your banker will not explain, however, is that you may well be able to enhance your privacy by obtaining a card from a completely different bank./ppWhy? Because the moment you use a card issued in your name by your principal offshore bank, you are creating a permanent electronic trail in the systems of the card network operator (for example Visa). So your banking records are no longer exclusively held by your offshore bank. The card networks typically process data all over the world, exposing it to numerous jurisdictions where investigators might be tempted to go on fishing trips./ppstrongu/ppAnonymous Cash Cards/u/strong/ppLike numbered accounts, anonymous cash cards do still exist, but there is a lot of hearsay and legend surrounding them. Here are the facts./ppBy anonymous cash card we refer to a plastic card which, together with a PIN code, can be used for withdrawing cash in automated teller machines around the world. It can also be used sometimes in merchants such as supermarkets, but acceptance is generally limited to certain locations. Its anonymous because, unlike normal credit and debit cards, there is no name printed on the card nor encoded on the magnetic strip./ppIt is not 100% anonymous, however. You do have to show ID to obtain such a card in the first place, and you also have to comply with all regular know your customer and due diligence rules. There are also strict withdrawal limits. These restrictions are necessary to make sure the card issuing bank operates legally and to ensure that the cards are not abused by money launderers./ppThere is one very, very big advantage to the anonymous cash card. That is when you use it internationally, the transaction is processed only based on the card number. The card network operator does not know who you are. The due diligence information (like passport copy) that you have provided is stored safely offshore in the card issuers office, away from prying eyes and protected by strict banking privacy laws. This is in stark contrast to regular international debit cards which have names not just printed on the card but also embedded in the magnetic strip so the name can be captured electronically./ppAnother advantage of the anonymous cash card is that should it fall into the wrong hands, the loss is minimal. ID theft is not possible when the card is anonymous! Without the PIN (which hopefully you have stored only in your head) the card is useless. There is no chance somebody could empty out your offshore account before you notice the card is missing. And, because its a stand-alone card, there is no chance that somebody could find out even the country, let alone the actual bank, where your principal offshore account is held. All you have to do is make one phone call and the card can be canceled and replaced./ppFinally, another advantage is legally avoiding reporting requirements. Anonymous cash cards do not class as a bank account. They are regarded as prepaid products, something between the electronic equivalent of a travelers cheque and a prepaid phone card. So if your country requires you to report offshore accounts, you dont need necessarily need to report an offshore anonymous cash card. Note: this report is prepared for a global readership. Some countries may have differing rules in this regard. If you are not sure about the reporting requirements in your country of residence, please check with your local tax authorities or a professional qualified in your jurisdiction./ppYou might be wondering how, if the card is not linked to your principal bank account, you can withdraw money from it? Simple: it is a prepaid product. You prepay, by means of an offshore wire transfer, an amount you are likely need over the period you determine. You can keep these transfer amounts relatively low so they remain under the radar./ppGlobal entrepreneur Peter Macfarlane is an author and lecturer on offshore finance, investment, due diligence and wealth creation matters. After fifteen years advising high net worth clients on offshore asset protection structures such as companies, trusts and private interest foundations, he decided on a career change and now mentors individuals who are interested in creating, preserving and growing wealth in a secure offshore environment. Peter defines wealth in the broadest sense, believing that money is worthless if you dont have health and happiness. He is now joint editor of The Q Wealth Report, a publication dedicated to publishing freedom, wealth and privacy information for a select audience. He offers a free sample copy to readers of ezinearticles. You can visit The Q Wealth Report at a target=_new href=http://www.qwealthreport.comhttp://www.qwealthreport.com/a/ppPeter is also author of the Practical Offshore Banking Guide which explains all the products listed above and much more in greater detail, including an appendix of contact information of banks where you can open accounts with these facilities. The guide is available for free online download for Q Wealth members via the members area of The Q Wealth Report website./pbrbr
