There are many questions potential expats have when they are planning to move abroad or when they first arrive in their new country of residence, and, as specialist expat financial advisers across Europe and in Grand Cayman and USA, we have probably heard them all, but today we will tackle the question of banking.
Do you need a UK bank account as an expat?
The answer is, as you might expect, not a cut and dried yes or no. For many expats, the thought of having their entire cash savings in one place overseas is disconcerting. A UK bank account, backed by the Financial Services Compensation Scheme (FSCS), will protect individual savings up to £85,000 and joint accounts up to £170,000.
If your cash deposits are greater in value, you should perhaps shop around for another account (if you wish to keep your savings liquid, that is) or you could invest some of your wealth.
As an expat without a UK address, opening new UK bank and building society accounts can be tricky and, once you are abroad, if your salary or pension is paid into a UK account or your savings are in a British bank or building society, the cost of currency conversions and transfer charges can soon mount up and negate what little interest you may be earning.
More options for expat banking
The answer could be international or offshore banking.
Some banks offer international accounts to help you manage your money and foreign currency more effectively while living abroad, but they often come with fees attached. These accounts can provide peace of mind that you will always be able to deal with people and correspondence in your native language and that they will be backed by the FSCS, but the rates of interest are likely to remain low, so your money won’t be growing.
Offshore banking represents a good option if confidentiality and favourable tax conditions are important to you. Although you may have to prove your income and pay fees for the added security, there are other benefits, such as having a chequebook in a local currency.
Thinking of changing your domicile? A local bank account could help
You could, of course, open a bank account in your country of residence and this can not only help to reduce currency conversion and money transfer fees, but it also brings you closer to the community.
Yes, you will need good foreign language skills, but it can make local monetary transactions a lot simpler. And, if you are planning to change your country of domicile, closing UK bank accounts in favour of local institutions shows an enhanced commitment to your country of residence.
Speak to an expat financial adviser in your area
Of course, local advice is probably the easiest way to understand what would be right for you and your particular financial circumstances, so why not talk to Blacktower. Many of our international financial advisers are expats themselves and have already asked themselves the same sorts of questions you are now faced with.