Q&A: Opening a foreign bank account

December 19, 2008

In these difficult economic times, is it wise to have some resources located in a bank account outside of the United States?

Q: In these difficult economic times, is it wise to have some resources located in a bank account outside of the United States?

A: Thanks to years of spy movies, Swiss bank accounts have long been viewed as the investment of choice for the rich, powerful, and sometimes criminal. Swiss accounts became fashionable thanks to a 1930s law that prohibits Swiss bankers from divulging information about their accounts or account holders-but that law quickly becomes meaningless if the account holder is suspected of criminal activity. For virtually all American investors, the federal government's newly granted authority to insure U.S. bank accounts up to $250,000 makes Swiss and other international accounts a less attractive option. If you aim to steer clear of the faltering U.S. economy, international stocks and mutual funds are a much simpler route to take. Just remember: The economic downturn is not unique to the U.S.