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Hi. I know Isle of Man is offering higher rates than USA based deposits right now but with yearly interest rates.

Anyone know of any other offshore bankings such as in the Cayman Islands for instance which is on the east coast instead which offers high rates of return right now?

I am fully aware the reason of banking of the Caymans is usually privacy however in todays globally dependent economy, one wants to be able to change into multiple currencies at any given time and get away from the Central Bank in the USA especially as the credit rating and political system here has diminished.

Was looking thru the Cayman Islands list of regulated banks and noticed one bank was giving in the 2%+ for short term, term based deposit account. However going through the long list of Class A (onshore and offshore) vs Class B (Offshore) and determining where to bank seems to be confusing with so many institutions competing for business via very reputable and credible banking institutions in the mix.

I was looking to Australia but those institutions seem to want you to travel to the island and considering my location in the world the Cayman Islands just makes more sense.

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Stupid me.

Here I was thinking Schwab enabled me to do as much of that as I wanted. And offered investor insurance.

edit: Buying foreign gilts in a US-based account gives you access to the world's currencies and interest rates without having to do any of that pesky off-shore reporting.

No, not interested in Schwab's rates nor investing in any firms tied back to the US Central Bank.

When dealing with finance, its always one person doing the pulling and the other doing the pushing and 2 sets of agendas and ideologies colliding just like what happened when the credit rating was cut which was predictable.

Schwab is a financial firm like all the others with the backing of a man named Charles Schwab and his biography is well established.

But you don't get to be a billionaire by investing your pennies in the financial firm and a seat on the exchange and the like gives you advantages that aren't existant elsewhere.

The old glory days are gone. Brokerage firms do generate a lot of accounts and some people take risks and build up significant piles of wealth with them, but the profits which are guaranteed come back to the brokerage firm itself and the chosen market makers for routing trades as well as by owning rights to the seats of financial exchanges if any.

Doing banking or trading with Charles Schwab is not the answer.

Ironically Charles Schwab has decided to put a brand new branch here since he shut down the previous location then it moved to a temporary one.

But unlimited ATM rebates and a system of risk based investing in a firm with ties back to the USA Central Bank is not the answer nor solution. I am well aware of Charles Schwab's firm since it was one of those huge national firms of yesteryear which always had higher commissions and routed trades to their own market makers and the like with a large national branch structure. Since the internet, the model has changed to more competitive firms with much lower rates on trades. And obviously by you thinking that by using the firm of Schwab you will get somewhere in life or even get close to Schwab's net worth in life is just quite frankly not going to happen and can't happen by ultimate design of the inherent system itself.

Right now the answer is getting outside the Central Bank of the United States and the Cayman Islands Regulatory Authority was hit hard in recent years as a large number of banks have now fled especially with the veil of secrecy diminishing as well as with an economic contraction of the Cayman Islands economy proper. So I am thinking it may very well be the time to get back in the game there and there will be a new wave of prosperity there.

Guess its all a matter of contacting the firms themselves and doing some leg work comparing the offerings and making business arrangements.

The firms consist of loads of banks from around the world and some locally established firms who set up shop on the Island to establish a system of economic commerce.

I'm interested in hearing the results of your legwork- but I think you'll find banking in the caymans is far more expensive than schwab or other free options in the us. In fact you'll probably see upwards of 0.5-1% of your assets eaten by fees, so that negates the interest earned..., and they don't cater to small accounts

Anglo Irish Bank on the Isle of man is offering over 2% interest without terms. However interest is only paid out yearly. It has no national residency restriction.

Schwab is .50% with unlimited ATM refunds right now if I recall correctly.

"Variable interest rate
Immediate access to funds
Interest is accrued daily and paid annually on the last working day in March
All interest is paid gross*
Available in GBP £, USD $ and Euro €
Minimum opening balance requirement 5,000 in GBP £, USD $ and Euro €
Maximum balance limit of 250,000 in GBP £, USD $ and Euro €
Only one account per depositor(s), per currency, is permitted
"

2.30% for accounts based in US Dollars. But the payout of interest is only once a year on the last working day in March.

"Cheque Deposits
Please note that a charge will be levied by the bank when handling the deposit of currency cheques. In addition correspondent bank charges
will be levied by the overseas bank administering this transaction and these will be deducted when the proceeds are received. It is normal practice
for these cheques to be sent direct to the bank on which the cheque is drawn and cleared funds will be passed to your account when the
proceeds are received
Timescales for receipts do vary according to the jurisdiction where the cheque is drawn and the underlying efficiency of the processing
organisation (this can take several weeks)."

Yeah it does have fees for withdrawl and no ATM card for cash withdrawals and the like.

The most competitive in the USA Ive found is Capital One with highest rates and NO FOREX.

I wanted to get my funds outside of the USA but in order to convert back to dollars you wind up having to go through an american institution like Wells Fargo which charges fees like with Anglo Irish Bank.

If you read my post, you will see that I did not recommend keeping funds in Schwab as a bank account, but using Schwab -- or really any brokerage with a foreign bond desk -- as a means of purchasing foreign gilts.

That way you get the currency move and interest of a foreign account with the insurance protection of a US-based account. Essentially a "roll your own" way of creating a foreign bank account that's US insured.

And yes, I did read your post(s).

Even for a family of modest means, their current and future income-linked USD currency risk exposure is so large they would need to move a minimum of $250-350k into foreign currency ... typically far more than their current liquid assets.

Simply getting an off-shore foreign currency account does very little to reduce a USD-based person's currency risk.

Wow, what started as a reasonable question quickly turned into a paranoid conspiracy rant...

psm321 said:   Wow, what started as a reasonable question quickly turned into a paranoid conspiracy rant...

Nearly always does. And it's a shame. Because if we spent 1/10 of the time discussing forex that we do discussing HYSA and CUs, FWF members would be better off, imo.

There are 2 legitimate subjects which are nearly impossible to discuss at FWF without generating some sort of flame war ...

1. How can a middle class US family effectively hedge some meaningful percentage of its enormous exposure to USD currency risk?

2. What are the fundamentals (production costs, sector-by-sector demand fluctuations, etc.) of precious metals?

I don't know that we will ever have a calm discussion of #2. But I hope that someday we can have a lengthy thread on #1. The average US family has much of its current assets, current income and future income all linked to the USD. A devaluing dollar impacts all three of these ... with the impact on future income perhaps the largest and most worrisome.

There are a number of ways -- nearly all imperfect -- for that hypothetical family to hedge its currency risks. Having a discussion on how to improve on these methods would be worthwhile.

Will I live to see the day we have a dispassionate discussion of currency risk on FWF? I dunno. I've spent 10 years on and off trying to do it and not succeeded. But that's just me.

BEEFjerKAY said:   

Will I live to see the day we have a dispassionate discussion of currency risk on FWF? I dunno. I've spent 10 years on and off trying to do it and not succeeded. But that's just me.
Well start a thread, lay out the rules, educate on what you know...involve mods to remove any rants & OT, dont respond to the same... simple really.

BEEFjerKAY -

I'd enjoy seeing you detail your strategy for (1). That's definitely a point of concern for me, and I'm sure many others. If we all agree not to feed the trolls, then we can have that discussion by just ignoring the interspersed posts that would otherwise be counterproductive. Detractors can't force anybody to respond to them.

Sounds like there may be more interest than I would have thought.

Today I'm "rag-picking" in the stock market. Depending on how choppy the stock market stays -- and how nice the golfing weather stays -- I'll give that a shot. Want to wait a few days until I have the time and bandwidth to nurse a new thread.

BEEFjerKAY said:   Sounds like there may be more interest than I would have thought.

Today I'm "rag-picking" in the stock market. Depending on how choppy the stock market stays -- and how nice the golfing weather stays -- I'll give that a shot. Want to wait a few days until I have the time and bandwidth to nurse a new thread.
Yes there is interest in #1 ...I guess one thing, beyond not being knowledgeable in that area, is the actually conversion to and back to US dollars. Unless you plan to someday relocate, obviously you have personal need and exchange rate to consider, with timing to cash out; which like a lot of things in life, does not always go as planned. Obviously during this time we have seen the swiss franc being the standout. When you have collected your thoughts.....

BEEFjerKAY said:   psm321 said:   Wow, what started as a reasonable question quickly turned into a paranoid conspiracy rant...

Nearly always does. And it's a shame. Because if we spent 1/10 of the time discussing forex that we do discussing HYSA and CUs, FWF members would be better off, imo.

There are 2 legitimate subjects which are nearly impossible to discuss at FWF without generating some sort of flame war ...

1. How can a middle class US family effectively hedge some meaningful percentage of its enormous exposure to USD currency risk?

2. What are the fundamentals (production costs, sector-by-sector demand fluctuations, etc.) of precious metals?

I don't know that we will ever have a calm discussion of #2. But I hope that someday we can have a lengthy thread on #1. The average US family has much of its current assets, current income and future income all linked to the USD. A devaluing dollar impacts all three of these ... with the impact on future income perhaps the largest and most worrisome.

There are a number of ways -- nearly all imperfect -- for that hypothetical family to hedge its currency risks. Having a discussion on how to improve on these methods would be worthwhile.

Will I live to see the day we have a dispassionate discussion of currency risk on FWF? I dunno. I've spent 10 years on and off trying to do it and not succeeded. But that's just me.



Hell, I'd like to hear a good discussion on both. PMs have such a large amount of disinformation on them from both sides that it's hard to filter through the crap to understand.

I also have never really given alot of thought to your major point about #1... USD value affects the value of future income. I don't know if I could contribute meaningfully to the discussion, but I do know that's a thread I would read.

Count me in as someone who would be interested in such a thread.

Also, I imagine doing a ton of banking in places like the Cayman Islands might attract some IRS scrutiny on your taxes (given all the actions they are taking regarding offshore accounts), so you'd want to be sure your nose is clean on that front/you aren't trying to evade taxes.

I'd be interested in both 1 and 2.

Beefy we need this thread on forex and you are just the man to do it

I know you don't often op threads , so if you'd feel more comfortable with someone else starting it , I'd be happy to....,even though my only foreign currency experience involved baht and pesos

SiS -
Thx for your kind offer. There's more to foreign currency than strip clubs and donkey shows.

Seriously, give me a couple of days. I've been giving it some thot on how to frame it. I can only promise to help frame the question and hope that others can help me craft a better answer than I've been able to come up with.

Good weather and stock picking are higher on my list for today. I've done more trades in the past 10 days than I did in all of 2010. Maybe 2009 and 2010 combined. But as you know that's not saying much.

Grex23, if you want to escape the clutches of the US Central bank then you have to abandon the US dollar too. I wouldn't be too concerned with the interest earned as the number is meaningless. I doubt that you will earn anywhere near 2% on a US dollar account; however since the dollar has lost at least 10% of it's value in the past year against many more stable currencies you're better off investing in the stronger currency. I wouldn't go to a broker like Schwab just because they offer insurance. The insurance is only as good as the entity providing the insurance. If that entity is the US Government then in my opinion that insurance isn't worth the paper it's printed on. There are many offshore banks that are much stronger than their US counterparts. Do your research and pick a couple. Then set up a multi-currency account where perhaps you have 20% each in AUD, CAD, CHF, HKD, SGD. I wouldn't count on doing this via mail. If you're serious, you're most likely going to have to visit the bank in person to open the account. There are firms that can facilitate the introduction, or you can hire a local attorney to set up your accounts, but all this does is eat into your returns with a lot of unnecessary fees. If you're on the east cost spend a few hundred and fly to islands for a day or two. If someone wants to open a Forex thread I would love to read the thoughts of others and would be willing to contribute.

Unless, I am missing something, grex23, moving to the KYD wouldn't get rid of your tie to the US central bank. The KYD is pegged to the USD.

Can the op inform us how does one go about opening a account in the isle of mann or cayman? I would imagine they are some heavy fees involved to open an account

A few years ago a buddy of mine opened an account with an online swiss bank.. Had nothing but terrific things to say. Free ATM withdrawals worldwide, high rates on GBP deposits etc.. Unfortunately once they realized how popular they were they raised their minimum balance requirements significantly

A: Offshore banks are not meant for tax dodging or money laundering. They will and have gotten prosecuted and will continue to do so.

B: The Offshore banks I am looking at are not american based institutions. They are in various nations around the world and are multi currency.

C: earthlink123 is right. The best banks are not in the United States Of America right now.

"Also, I imagine doing a ton of banking in places like the Cayman Islands might attract some IRS scrutiny on your taxes (given all the actions they are taking regarding offshore accounts), so you'd want to be sure your nose is clean on that front/you aren't trying to evade taxes."

I am not evading taxes, I am fully reporting all earned income from the Cayman Islands or anywhere else back to the IRS.

However if you fulfilled your tax responsibilities and made payments to the IRS on your rightfully owed taxes as a US Citizen then switched citizenship back to the Cayman Islands, you SHOULD only be responsible for Cayman Islands taxes since you are no longer an American citizen and paid your taxes and dues in full while you have resided in the USA and been an American citizen.

You do not need to be on the island, you just are asked questions about the funds and require some documentation, possibly notary public and accountant/lawyer review. Depends on the institution.

A lot of banks have websites and information on the web but they don't routinely have a strong internet presense or a lot of information on the web as to fees and rate structures. Some firms have websites presenses and a lot of marketting information and the like but very real actual information about why funds should be there.

Considering the neutrality of Switzerland, it is a very good banking destination and remains so. Cayman Islands is a UK protectorate.

I have not checked out Switzerland or other european nations. I just saw one account based in Isle Of Man but the fee structures didn't make sense.

FYI if you wanna hide money Vietnam and Thailand (SE Asia in general but those are the 2 famous places for this, do your research) are your best bets. Be warned, they'll hide your money, but if they decide to say that you never had money with them, there is very little you can do.

Vietnamese institutions offer very high rates of interest but the nation is very unstable.

Not that the USA system is stable, in fact it isn't. It has fallen sharply.

The World’s 50 Safest Banks 2010:

S.No. Bank Country
1 KfW Germany
2 Caisse des Depots et Consignations (CDC) France
3 Bank Nederlandse Gemeenten The Netherlands
4 Zuercher Kantonalbank Switzerland
5 Landwirtschaftliche Rentenbank Germany
6 Rabobank Group The Netherlands
7 Landeskreditbank Baden-Wuerttemberg - Foerderbank Germany
8 Nederlandse Waterschapsbank The Netherlands
9 NRW.Bank Germany
10 Royal Bank of Canada Canada
11 National Australia Bank Australia

Safest bank in 2010 listing. Notice how USA isn't on the top 10 list. It has fallen sharply as of late and Citibank which was one a global huge powerhouse is not even on the listing.

Singapore has fared very strong as well even though it isn't in the top of the safest bank listings as of 2010.

Personally, i would be interested in a "forex for dimwits" thread - or even a "forex spelled out so a relatively normally intelligent person can understand it" thread; I understand the advantages of a forex acct over an etf, say, but that's about as far as I've been able to get, given my limited capacities.

Friend of mine is fond of Dominican Republic bonds and accounts as they pay high interest. He is counting on WB/IMF to prevent a banking collapse though. He is doing it for interest not as a currency hedge.

(He also spent a lot of time in the Carribean working in telecom)

gotsmack said:   FYI if you wanna hide money Vietnam and Thailand (SE Asia in general but those are the 2 famous places for this, do your research) are your best bets. Be warned, they'll hide your money, but if they decide to say that you never had money with them, there is very little you can do.
If you have a baby mama in these countries it helps, you can setup an account for your kid where you control it. And restrict it so she has no sole access



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