What do international banks have to offer?

Andrew Munro 24 October 2016

You can choose between domestic and international banking. Find out which is preferable for you.

international banks feature

When you open a bank account you can choose between a domestic and international account. Domestic banking may be the everyday option you’re used to, but if you opened a domestic account with first comparing it to international ones, you might have missed out on a more preferable banking option without realising it.

This guide explains some of the benefits and risks of using an international bank account so you can decide whether it’s the right option for you.

Five reasons to open an international bank account

International bank accounts are an option for combining a lot of different benefits into one package. Do any of these sound good to you? It might mean that an international bank account is the right choice.

1. Foreign currency use

Domestic banking here is typically done all in Australian dollars, but international accounts let you use overseas currencies more easily, often with more preferable exchange rates and fewer fees. International banking can get you more value for money if you use a lot of foreign currencies. International bank accounts can get you similar benefits to multi-currency bank accounts, with other useful differences too.

2. International money transfers

If you frequently send money overseas then an international bank account might be able to get you better rates, lower fees and more benefits. Enjoy some perks of international money transfers with more ease and convenience.

3. Access to foreign markets

Only having a domestic bank account might inhibit you when it comes to making foreign investments, while an international bank account may let you more easily access this part of the market. If you have a keen interest in forex trading or international share trading then it may be worth considering an international bank account.

4. Overseas investments

Are you making investments overseas? Some Australians, feeling squeezed by the domestic market, are buying property overseas and enjoying the benefits. If you are interested in doing this then an opening international bank account is worth consideration.

5. Tax advantages

International banks bring opportunities to enterprising account holders in the form of applied local tax laws, or “loopholes” as some might call them. If you want to manage your bank account for optimal returns then an international bank account, rather than a domestic one, provides more options.

Which banks offer international accounts?

Two of the most widely known international banks operating in Australia are HSBC and Citibank, both of whom offer options to facilitate offshore banking. Compare the benefits of their international accounts to see which might be more preferable for your needs.

FeaturesHSBC Day to Day Transaction AccountCitibank Plus Everyday Account
Monthly fee$0$0
Overseas ATM accessNo fee at overseas Citibank ATMs$4.50 fee per transaction plus currency conversion rate
International transfer feeFlat $20 regardless of sumFree transfers to Citibank accounts in many countries
Overseas shoppingNo fee charged on international purchasesExchange rates and fees may apply
Interest earntEarn interest with linked Citibank savings accountsEarn interest with linked HSBC savings accounts
Currency optionsAll major international currencies, and moreAll major international currencies, and more
Learn moreLearn more

What are the pros and cons of an international bank account?

An international bank account has a lot of advantages, but you should also be aware of the potential risks involved.

What are the benefits of having an international bank account?

  • Tax: Take advantage of overseas tax rates, conditions and privacy laws with an offshore bank account. For example, you might open up an international bank account based in a country that has lower tax on investment income than Australia does.
  • Privacy: Sensitive financial information may be safer overseas, in an anonymous account, than in a standard domestic bank account. If your occupation requires you to protect sensitive client information, or your own, then an international bank account may be preferable.
  • Multiple currencies: With a standard bank account you will typically need to exchange money through the bank or a third party, paying fees and exchange rates on that transaction. International bank accounts typically use more types of currency with more fluidity.
  • International money transfers: If you keep making international money transfers through a domestic bank account, you can very quickly spend a large amount on fees and currency exchange rates. An international bank account typically lets you do it with preferable rates and at a lower cost.
  • Linked accounts: Depending on your preferences, you may link other accounts to your international bank account to earn interest on them or enjoy other benefits.
  • 24 hour service: Domestic Australian banks usually run on standard business hours, but international accounts need to be manageable and accessible 24 hours a day. Choosing an international bank can get you easier access to your account around the clock.

What are the risks of having an international bank account?

  • It is your responsibility to remain within the all applicable laws when holding overseas accounts. It may be advisable to use an experienced tax accountant to help you.
  • Money held in Australian bank accounts is protected by the Australian Government Guarantee Scheme. Money held in overseas bank accounts does not have this guarantee.
  • There may be additional fees and costs involved with international banking, and these can vary between providers. You should make sure you are well informed about all applicable fees and conditions before opening an account.

Three things to do before opening an international account

Get more out of your international bank account by ticking these off.

Have a purpose in mind

By deciding if you want your account to be more geared towards specific benefits, like easier international investments, more tax options or cheap international money transfer, you may be able to hone these benefits by tailoring your account or managing it in certain ways.

Know your must-haves

Know what the account absolutely must have. For example, if you know with certainty that you will be investing in the Chinese property market then you’ll probably want an account that delivers advantageous Australian-Chinese currency conversion rates and lets you quickly transfer and convert funds to take advantage of great deals or compete at auctions.

Know the law

International accounts can be more legally complicated because they might mean obeying the laws of two different countries at once. You need to operate within both Australian law and the laws of whichever nation your account is being held in.

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