Can offshore banking be your answer to earning higher returns on your investment funds and offsetting the rising cost of living? Often the answer to that question is, yes! Do you know that the term ‘offshore’ originates from the Channel Islands (Jersey, Guernsey etc.)? They are off the coast of Great Britain and have a policy of taxation that can be beneficial for some.

Today the term is sometimes used to refer to tax havens in general. When you begin thinking about moving some of your investment money offshore you will quickly learn that governments don’t like you to have money in a place where they can’t track the movement of every penny.

Agencies like the I.R.S. make big news out of prosecuting a few companies or individuals for hiding profits on foreign investments and not paying taxes on those gains. Those few cases frighten many people so that they won’t even consider opening an offshore bank account.

Let’s set the record straight. There is nothing illegal about moving your investments offshore. Why should it be? It’s your money. In a free society you should be able to do what you want with your money unhindered by your government.

Don’t confuse offshore investing with tax avoidance. As a citizen of the U.S., Canada or Great Britain you are required to report and pay taxes on all profits and income no matter where it is earned.

There is nothing confusing about an offshore bank account. It is simply an account held in a bank that is located outside your country of residence.

In most cases you would choose a bank that is located in a low tax jurisdiction and offers certain financial and/or legal benefits to account holders. Panama is good example of a country that is attracting foreign bank deposits.

They use the U.S. dollar as the national currency, so there are no exchange costs for U.S. citizens. Because the U.S. managed the Canal for so many decades there are many Panamanians who speak English. An even greater benefit of Panama banking is they have no agreement with the U.S. to share information about their customers. Read the rest of this entry »

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As the use of the Internet continues to expand, more banks and thrifts are using the convenience and ease of the Web to offer products and services, as well as enhance communication with customers. According to the Federal Deposit Insurance Corporation (FDIC), the Internet offers the potential for safe, convenient ways to shop for financial services and conduct banking business - 24/7. However, to ensure safe banking, customers need to be educated in making good decisions that protect them from costly surprises or even scams.

Protecting Deposits

Whether seeking a traditional bank or online bank that has no physical offices, the FDIC advises to make sure that the institution is legitimate and that deposits are federally insured.

The following are safety guidelines for those considering Internet banking:

Seek key information about the bank posted on its Web site. Read the “About Us” section that describes the institution where a brief history of the bank, the official name and address of the bank’s headquarters, and information about its insurance coverage is provided.

Be on the watch for fraudulent Web sites. Keep an eye out for copycat Web sites that use a name or Web address very similar to that of a real financial institution. These sites hope to lure in unsuspecting customers who might provide personal information, such as an account number and password.

Verify the bank’s insurance status. Customers should look for the familiar FDIC logo or the words “Member FDIC” or “FDIC Insured” on the Web site. Some banks operating on the Internet are not insured by the FDIC, such as those chartered overseas. Customers who choose to bank with these types of banks should know that the FDIC may not insure deposits.

For insurance purposes, banks may use different names for online and traditional services. This however, does not mean customers are dealing with separate banks. To determine maximum FDIC coverage, deposits at the parent bank are added together with those at the separately named bank Web site and are insured for up to the maximum amount covered for one bank.

Only deposits offered by FDIC-insured institutions are protected by the FDIC. Products such as mutual funds, stocks, annuities, and life insurance policies sold through Web sites or at the bank itself, are not FDIC-insured, are not guaranteed by the bank, and may lose value.

Protecting Privacy

Bank customers often want to know how their personal information is used by their bank and whether it is shared with affiliates of the bank or other parties. As of July 2001, banks are required to provide customers with a copy of their privacy policy, regardless if business is conducted online or offline.

Customers should be advised that banks may want to share information about their customers to help market products specific to needs and interests. Customers who do not wish to participate in information sharing have the right to prevent the bank from sharing personal information with any parties not affiliated with the bank.

Some companies may also track the Web browsing habits of their customers while at the bank’s site, to better understand interests. Customers can ask whether a specific bank track browsing habits if these practices pose a concern.

Protecting Transactions

Learning how to safeguard banking information, credit card numbers, Social Security Number, and other personal data is of vital importance when conducting business on the Internet.

Customers who want to ensure their transactions are secure should carefully examine a bank’s Web site for information about its security practices, or contact the bank directly. Examples of security features include:

Encryption: the process of scrambling private information to prevent unauthorized access. Some browsers display a small icon on the screen that looks like a “lock” or “key” when customers conduct secure transactions online.

Passwords or PINs: When customers access an account online, a password or personal identification number (PIN) should be required. Passwords or PINs should be unique and changed regularly. Avoid birthdates or numbers or words easily guessed by others.

General security: Virus protection over personal computers and physical access controls should be used and updated regularly.

Popularity: 21% [?]