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How to Open Foreign Bank Account

By HousingWatcher   2012 Dec 22, 2:36am   ↑ like (1)   ↓ dislike   3,784 views   14 comments   watch (1)   share   quote  

So with interest rates in the U.S. pathetically low, I was wondering if there is anyway to open up a bank account in a foreign country with decent interest rates, without actually going to that country. Currently, interest rates in Australia are quite decent, paying around 4.7%, so I was wondering if anyone here has ever opened a foreign account before and, if so, how do you do it?

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1   Bigsby   2012 Dec 22, 2:38am  ↑ like   ↓ dislike   quote   top   bottom   home   share  

Be a foreigner.

2   bob2356 (59/60 = 98% civil)   2012 Dec 22, 3:34am  ↑ like   ↓ dislike   quote   top   bottom   home   share  

First you need a multi national bank. I use HSBC. I know the Hong Kong branch, but not Australia so this applies to HK. Call the branch where you want to open. Explain you are a foreigner and want to open an account and will certify all your paperwork through the local (your home country) branch. They will fax or email you the documents then you have to take them to a HSBC branch in the US with international banking services and have the paperwork certified. If you live in Kansas or Montana obviously you are hosed on this part. Send the papers back and you have your foreign account. I'm not sure if all the new banking regs in the last 2-3 years has made this process invalid, you would have to ask.

That being said, moving large amounts of money to another currency to try to arbitrage interest rates is a very dangerous game best played by professionals. You need to look at the net interest rate after inflation, then the currency stability. I've seen my local currency move between .55 and .89 more than once in the last 5 years. I keep money offshore for safety more than investment.

Don't forget to file TDF-90-22.1, aka FBAR, by June 30 each year.

3   HousingWatcher   2012 Dec 22, 5:58am  ↑ like (2)   ↓ dislike   quote   top   bottom   home   share  

So bob, what country do you have money in, and what interest rate are you getting?

4   bob2356 (59/60 = 98% civil)   2012 Dec 22, 10:23am  ↑ like (1)   ↓ dislike   quote   top   bottom   home   share  

Almost no cash in banks in the US just real estate. Most cash in New Zealand at around 3%. Had some in HK but the interest rates have dropped to almost zero so I've moved most out. Don't keep much liquid cash anyway. I'm going to be in Malaysia and Indonesia in July. I will check out banking there while I'm on the ground.

Forget NZ unless you are on the ground. The only banks are local yokels and oz based local yokels. The only multis at all are JP Morgan and Citi. Both only do commercial and barely at that.

5   lostand confused (29/29 = 100% civil)   2012 Dec 22, 10:46am  ↑ like (1)   ↓ dislike   quote   top   bottom   home   share  

Also be careful of currency fluctuations. A few years ago, the Aussie was about 60 cents to the dollar. Now it is 1.05 to the USD-closed just under 1.04 last Friday.

If you invested when it was 60+ cents great-but if an Aussie had inveted in USD-sucks to be him/her.

6   WaPoIsHitler Lipsovitch (59/59 = 100% civil)   2012 Dec 31, 12:03am  ↑ like   ↓ dislike   quote   top   bottom   home   share  

Form an overseas company, and put the money in a bank account controlled by your company.

7   chimosky   2013 Jan 10, 10:30pm  ↑ like (1)   ↓ dislike   quote   top   bottom   home   share  

I want to open foreign account

8   American in Japan   2013 Jan 12, 9:27pm  ↑ like   ↓ dislike   quote   top   bottom   home   share  

I opened a Citibank account in Japan. They have Australian dollar, New Zealand dollar and Canadian dollar accounts (as well as US dollar and yen).

9   FortWayne (44/45 = 97% civil)   2013 Jan 15, 6:51am  ↑ like (2)   ↓ dislike   quote   top   bottom   home   share  

This interests me too. If all wealthy people hide their money off shore, there has got to be a good benefit to that.

10   bob2356 (59/60 = 98% civil)   2013 Jan 15, 9:18am  ↑ like   ↓ dislike   quote   top   bottom   home   share  

American in Japan says

I opened a Citibank account in Japan. They have Australian dollar, New Zealand dollar and Canadian dollar accounts (as well as US dollar and yen).

Did you have to do it in person?

11   bob2356 (59/60 = 98% civil)   2013 Jan 15, 9:29am  ↑ like   ↓ dislike   quote   top   bottom   home   share  

FortWayne says

This interests me too. If all wealthy people hide their money off shore, there has got to be a good benefit to that.

Pretty amazing how successful the government has been in their 1984 style brainwashing campaign. There are many very good reasons to have offshore banking accounts including perfectly legal tax avoidance ala Mitt Romney. Yet the assumption of most people have is that offshore accounts are used exclusively for hiding money and tax evasion.

The end game of all this isn't tax evasion. It will cost more to administer fatca than the irs will ever recover from prosecuting tax evasion. The end game is unlimited access to snoop into every aspect of every citizens life without oversite. The whole offshore accounts/tax evasion hype is just a smokescreen.

12   errc (30/30 = 100% civil)   2013 Jan 15, 9:32am  ↑ like (1)   ↓ dislike   quote   top   bottom   home   share  

I don't understand what advantage you are trying to gain? Swap USD for AUD and than park the cash in aussie bank so you can earn their higher interest rate, and than swap AUD back for USD?

If USD strengthens relative to AUD during your time frame, you risk having your gains erased and turned to losses,,,,

Just seems like such a minimal spread on rates, and a whole lotta risk, for the possibility of not that much returns,,,,

If you're chasing returns on your cash, why not get on the business end of the trade over at prosper.com or something like that?

13   Peter P   2013 Jan 15, 10:39am  ↑ like   ↓ dislike   quote   top   bottom   home   share  

Then why not a leveraged carry trade?

Not investment advice.

14   WaPoIsHitler Lipsovitch (59/59 = 100% civil)   2013 Jan 16, 8:08am  ↑ like   ↓ dislike   quote   top   bottom   home   share  

errc says

If you're chasing returns on your cash, why not get on the business end of the trade over at prosper.com or something like that?

Interesting! Will have to look into this.

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