There are many reasons for establishing and growing offshore bank accounts. For some, the goal is to set aside resources for retirement. Others may have other plans, like funding their children's continuing education.

Opting to set up offshore banking and investment accounts provides the ideal platform for this savings goal. You may even find it a more practical solution than setting up a college fund at home. These qualities make this approach to saving for college such a great strategy.

Competitive Interest Rates on Savings Accounts

If you look at the interest rates offered on offshore accounts in certain nations, then compare them to what you would be able to lock in at home, the difference may come as a surprise. Depending on where you live, the interest rate with an offshore account may be as much as twice what you get domestically. Think of what that would mean in terms of earning more interest per year.

Many offshore savings and time deposit accounts do indeed require minimum balances to begin generating interest. Even if you can't deposit those minimums right now, go ahead and establish the accounts. Once in place, it will take less time than you thought to meet and surpass the balance required to begin earning interest. You may even become eligible for a better interest rate as the account balance increases.

Wide Variety of Investment Opportunities

Offshore investment accounts are also worth considering, primarily because of the variety available. There will be investment opportunities found offshore that are not available domestically. See this as a way to diversify your portfolio and open yourself up to investments that could generate significant returns.

If you opt for this approach, make sure you understand the laws and regulations governing investments in the country where they are based. Many nations have laws in place that offer incentives to offshore investors. Between investments with low volatility and reasonable returns and the protections provided by those laws, you have the chance to grow the college resources steadily as the years pass.

Utilize Currency Exchange Rates

Utilizing currency exchanges is a viable way to grow wealth for any purpose. That includes creating resources for college funding. The goal is to follow the foreign exchange market and invest in certain currencies when performing well against others. You also want to know when to sell those holdings and when to buy them.

You can also use currency exchange to purchase assets in currently more competitive currencies, hold them, and then later sell those assets at a profit. The proceeds ultimately end up as seed money for more investments or are deposited into an offshore savings account for the college fund.

Minimize Tax Obligations

One of the incentives many nations offer to offshore investors is tax breaks. In some settings, you may not owe any taxes on the interest generated by your offshore accounts. At other times, the amount of taxes owed is minimal. You will likely find that the tax structure is more favorable than what you would receive at home.

Lower tax obligations make it easier to continue adding a little more to your offshore accounts regularly. Since you only have a limited number of years before your children head to college, you must make the most of the time left. Even a minor reduction in the tax obligation helps ensure your child can focus on studies more and cover tuition costs, living quarters, and other essentials.

Perceived Distance from Offshore Accounts

The adage, "out of sight, out of mind," can apply to funds in offshore accounts. While you know you can access them via secure online access at any time, that they are in another country can be your advantage.

That perception of not being as close as your home bank makes it less likely you will access the offshore funds for financial obligations you need to meet. It's less likely you'll consider your offshore accounts for ordinary expenses, leaving those funds to continue drawing interest for college purposes.

Safety of Saving Money in a Stable Setting

Issues like inflation, political upheavals, and other factors that might affect banking at home don't necessarily touch the money you have tucked away in offshore banking accounts. Even if inflation ultimately affects the economies in other nations, it may not be to the degree that things shift at home.

Interest rates may drop at home, but you still earn a rate on your offshore savings accounts. These balances will continue to grow even as you adjust to the situation in your home nation.

Kids Begin Worklife without Being Saddled with Debt

Your goal is to provide your child the chance to attend college and earn a degree without the burden of student loans. Meeting that goal requires developing a solid plan of action that accounts for inflation, your ability to set aside money each month, and, sometimes, prioritizing your wants and needs.

Look closely at what setting up a time deposit or other offshore account can do to help grow wealth between now and the day your child is ready to start college. You may be surprised at what a difference this one choice will make.

Author bio:

Luigi Wewege is the President of Caye International Bank, headquartered in Belize, Central America. Outside of the bank, he serves as an Instructor at the FinTech School in California, which provides online training courses on the latest technological and innovation developments within the Financial Services industry. Luigi is also the published author of The Digital Banking Revolution, now in its third edition.