One of the misnomers about an offshore bank account is that it is only for the very wealthy. An offshore corporation plus offshore bank account is more economical than one might think. An offshore bank account is an account that you open in a country or jurisdiction outside your own. Thus opening an offshore bank account is a good place to begin on the freedom road and such an offshore banking relationship can provide the foundation of what follows. The most obvious legitimate reason for opening an offshore bank account is the cash-flow advantage of getting interest on deposits paid gross, without the withholding tax usually imposed on non-resident bank accounts. One of the numerous benefits of opening an Offshore Bank Account is that they are often situated within tax havens, which means that the individual pays less tax.

Offshore Bank Account

Most offshore bank accounts come with a cash card that can be used to withdraw funds anywhere in the world. Offshore Bank Accounts the Ultimate Protection Seeking to protect you money in an offshore bank account once someone has laid a claim to your assets just won’t happen, its already too late. An additional benefit of an offshore bank account is that if you are not willing to leave a high tax nation you can benefit by moving money to a tax free secure and private haven. Asset security and privacy is what the offshore bank accounts and the financial world are designed to accommodate.

Opening an Offshore Account

To actually open an overseas bank account, you must firstly do some research – which country and which bank will be most suitable for your needs. Although you may not need any of these things; opening an offshore account can be as straightforward as just having a checking or savings account. Most people who open an overseas bank account want to enjoy the significant tax breaks that this will give them. A passport, a driving license, and a untilty bill are all you need to open an offshore account.

Privacy

Offshore privacy can no longer be taken for granted. Having a offshore bank account may be something you can explore in regard to banking privacy, being insulated from predatory lawsuits, building your assets and to legally avoid excessive taxation. This is a popular choice for people who are very particular about their privacy and anonymity. For maximum privacy and asset protection, however, the best advice is this: Establish an offshore corporation to own your offshore bank account. The Anonymous Panama Corporation adds in a nice thick layer of privacy protection. Right now, a secure, private bank account is reserved for your personal use in countries with some of the strongest bank privacy laws on earth.

Investment

An offshore account is an excellent way to diversify investments and take advantage of global tax savings. Sure you have to report your earnings in most places and pay taxes, but you can still open up an offshore bank account for greater investment possibilities, protection from domestic lawyers who might want to sue you for your life savings and for greater financial privacy. And, you must report any interest payments or dividends you have received from any offshore investments made using that account. You can have instant access to the world’s best investment opportunities, including currencies and precious metals without concern about your home nation’s legal restrictions.

Legal

The proper way to open an offshore bank account is through an experienced law firm offering offshore legal services. As a matter of principle the rights to privacy can be suspended when a criminal investigation is underway. Don’t rely on banking secrecy being upheld if you are engaging in illegal activites. Some countries like Panama are more tolerant than others.

Services

Typically a tax free haven is offered by countries that have little or no means of exporting goods and services to offset the imbalance they would otherwise have in terms of their overall currency exchange. You may want to consider other services the bank offers, such as different types of accounts, credit cards and safety deposit boxes. There are advantages either way here – a larger bank may offer greater security and more services, but with higher fees. Many offshore banks offer a full range of private banking services, but have certain terms and conditions that need to be met by their clients. An offshore corporation combined with the quality banking and commercial services found in Panama consistently meet the needs of diverse types of clients.

International

If you’re in regular receipt of international transactions it can make sense to establish an offshore company structure in a jurisdiction like the Seychelles where no tax is levied on income generated outside the jurisdiction and where such a company is not required to fill out annual financial or activity reports. Such a company can then open and hold an account which can be used for international personal OR business transactions. If you’re moving overseas you have a number of choices available to you – you can let your current bank know and they may change your account type to be an international account. You can then use this account to pay bills back home and conduct international transactions.

Visa

The way these programs work is Visa and MasterCard do not know who the actual card holder is – no date of birth, no address, no tax id numbers etc. So a subpoena to MasterCard or Visa would produce very little and since the bank is in a country with bank secrecy this avenue is going to be a long burdensome process that would be unlikely to be pursued and could only be pursued by a government in a criminal matter. The more private way of doing this is to get a Visa or MasterCard debit card from another bank, not your Panama bank.

Bank ATM Debit Card

Some people obtain an ATM card from another unrelated financial institution. These cards typically have no name imprinted on them which right away adds to your privacy protection. These cards also do not leave a trail to your real bank. Money can be transferred to the ATM card by wire from your Panama or other bank account and then withdrawn as needed. Some people are fond of using these cards to cover corporate expenses like travel, entertainment and other business expenses. Usually the ATM card purchase requires a copy of a passport.

Offshore banking has many advantages, some of which include the access to politically and economically stable jurisdictions, and the lower cost and higher interest rate. You can use a foreign bank account as an integral tool in an aggressive, two-pronged offshore wealth strategy. In other words, an offshore private bank account is not just a place for safekeeping cash. You might think it is a bit odd at first to open an offshore account when away on holiday but if you are going to that destination anyway on holiday it makes something nice to do one day.

Content – Members-Only Content for WordPress

Deposit insured in India, if bank fails

- S. C. Ojha

The depositors are secured in India if a bank fails. In India norms of banking is very strict and monitoring system is in direct control of country’s central bank Reserve Bank Of India.

In the beginning in 1961 an act came into existence the Deposit Insurance Act, 1961 and made effective on January1, 1962.  Up to 1977 two organizations the DIC & CGCI were looking after the function of deposit insurance and credit monitoring. The present Deposit Insurance and Credit Guarantee Corporation (DICGC) came into existence with merger of DIC & CGCI on July15, 1978.

Covered Banks

In 1968 co-operative banks have got protection under deposit insurance with some eligibility norms. Initially only commercial banks inclusive of State Bank Of India & its group and foreign banks operating in India were covered.

Presently all commercial banks, foreign banks working in India, local area banks, regional rural banks, all eligible urban co-operative banks( central, state & primary co-operative banks ) are covered under the Deposit Insurance Scheme.

The insurance coverage scheme is compulsory in India and no bank can withdraw from it.

Types of Deposit Covered

All types of bank deposit are covered under this scheme like savings, current account, fixed deposits, recurring deposits etc.

Deposit not covered

Any amount due on account of and deposit received outside India, any amount, which has been particularly exempted by DICGC with the prior approval of RBI are not covered under this scheme. Govt deposits Central or State, Foreign Govt deposits, inter-bank deposits, deposits of State Land Development Banks  with State Co-Operative Bank are also not covered.

Limit of Amount Covered

Each depositor is insured upto a maximum of Rs. 1, 00,000(Rs one lac) per bank. Insurance cover is available customer wise not scheme wise.  The deposit kept in different branches of same are aggregated and total cover provided will be a maximum of Rs. one lac. All funds held in the same capacity in the same bank will be clubbed together for the purpose of insurance cover.   Joint account will be treated as separate account and will get cover. Each joint account with different combination treated as different entity and get insurance benefit separately. All joint accounts with same person’s combination will be treated as one customer account and the combined total will be insured upto Rs, one lac.

De-registration of a bank & Liability of DICGC

If bank is prohibited from receiving deposit, or it’s licence is cancelled by RBI or it is wound up compulsorily or voluntarily or it is ceases to be a banking company or on amalgamation or merger or reconstruction where acceptance of deposit not permitted, the registration of an insured bank stands cancelled. In such situation liability of DICGC is limited to extent of deposits as on the date of cancellation.

In another situation DICGC cover is limited upto date of cancellation where a bank fails to deposit the premium amount for three consecutive periods.

Payment of Insurance Premium

Depositors have no liability to pay insurance premium. Deposit insurance premium is fully paid & born by the insured bank. Now DICGC increased the premium rate from 5 paise per Rs. 100 per annum to 10 paise per Rs.100 per annum since April 2005. The premium is payable half yearly in advance in April & October. The premium payment is compulsory to pay latest by 31st may & 31st October.

Payment of Insured amount

If a bank fails or goes into liquidation, the DICGC is liable to pay to each depositor up to Rs. one lac. The payment will be made through liquidator within two months from the date of receipt of claim from the liquidator.

In case of amalgamation or reconstruction or merger with another bank, the claim will be paid to concerned existing bank by the DICGC. The claim will be payable to transferee bank within two months from the date of claim list submission. In such case, the difference amount between the full amount of deposit or the limit of insurance, which ever is less and the amount received under amalgamation/reconstruction scheme will be paid.

The above deposit insurance scheme came into force keeping the view to protect the interest of small depositors of the country. Now feel free to enjoy opening your account in different banks and get your deposit secured more & more.

Historical data related to bank failure in India

At present upto march ’08 there are 2356 banks including public sector, private & co-operative banks in India are protected under scheme of DICGC. In previous three years no instance of failure of any major bank in India.

A number of co-operative banks have failed due to various reasons in previous years. From 01.04.06 to 30.09.08 there are 63 co-operative banks are failed and all qualified customers get payment from DICGC. In these failure banks Gujarat is on number one with 25 banks and Maharashtra is on 2nd position with 10 banks. The size of failure banks are a little bit and not in percent. It is magic of Indian economy and strategic control of the system that Indian banks are protected well.

More insurance cover expected

In USA in a temporary phenomenon all deposit accounts are insured up to at least $250,000 per depositor until December 31, 2009 at the place of regular insurance coverage $ 1,00,000 . Unlimited insurance coverage also provided for entire amount to all non-interest bearing transaction deposit account on temporary basis up to 31.12.09 for strengthen banking system and making confidence in depositors in USA.

Likewise USA, in India govt may think. In present context of global economic scenario for more protection of public deposit in the country, limit of insurance coverage is required to be increased to Rs. 2.5 lac from present Rs. 1 lac .

It will more beneficial for depositors in India if RBI can liberalize banks to get additional deposit insurance cover on higher premium for their depositors for attracting more deposits and strengthening the economy.

contact@bankingonly.com

Create a video blog…instantly.

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:

1. 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.

2. 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.

3. 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.

4. 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.

5. 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:

1. 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.

2. 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.

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

Content for WordPress

Do they take the market rate at the exact time of the transaction or do they use the market rate at the close of the business day?

Or do they use a rate determined each morning and posted on the sponsoring bank website – to which it’s better to check their rates before making a purchase.

Content