How to ensure your money keeps working while you're working

Where and how to invest your money is probably one of the most important considerations for an expatriate. The interest rates on offer, type of account and security of funds are all potential pitfalls waiting to trip up the unsuspecting novice.

Many expatriates operate two bank accounts: a local one in the country where they are going to live that will fund everyday expenses, and an offshore account in which to receive their salary and accumulate savings. Don't be put off by the term "offshore" - it simply refers to any centre where international business can be done in a favourable tax climate.

The main benefit of banking offshore is that interest is paid gross rather than net of tax. Most offshore current and savings accounts will enable you to build up wealth securely, though you should check an institution is registered with the relevant regulatory body. Most UK banks and building societies have offshore subsidiaries - and a reputation to maintain. These include:
Abbey National Offshore
(www.anoffshore.com)
Alliance & Leicester International
(www.alil.co.im)
Barclays International
(internationalbanking.barclays.com)
HSBC Offshore
(www.offshore.hsbc.com)
NatWest Offshore
(www.natwestoffshore.com)
Halifax International
(www.halifax-international.com)


For more information on offshore banking, visit www.offshorebanking.com

Skipton Guernsey Limited, the offshore subsidiary of Skipton Building Society, offers the following advice for anyone looking to invest: What are the fees? Many offshore deposit takers will levy banking fees Security. How safe is your deposit? Deposits may be guaranteed by the parent company. In the past, expatriates had to contact their banks from abroad to apply for an account, which was both costly and frustrating. Now some institutions allow the information and application forms to be downloaded from the internet. Get gross interest now, without waiting for the forms. Many expatriates simply move abroad and forget to tell the bank, which will still deduct basic rate tax from the interest. Choose the tax year. If you choose an interest payment date in the next tax year, that could mean you do not have to settle any tax due for at least 12 months - perfect if you have just sold a house, for example. Such deferral can also be attractive for those approaching retirement where income may reduce. Put your eggs in one basket. Many expatriates tend to open one account here and another there. The net result is that several accounts accumulate with small balances earning low rates of interest. Closing these secondary accounts and pooling the funds into one account will boost your return, as the larger the size of the deposit, the higher the rates.