Foreign Deposits
Categories: Econ, International
Americans are very U.S.-centric, and foreign deposits are no exception.
Foreign deposits are deposits that are put into U.S. banks that reside outside of the U.S. Any deposits made off of US soil aren’t covered by US deposit insurance (think: “FDIC insured”).
Depending on the bank, the foreign deposit may be able to be withdrawn where the deposit was made (abroad) and in the U.S. (domestic). These are called “dually payable” foreign deposits. Other banks only let you withdraw the money where you deposited it.
Foreign deposits are also free from deposit insurance premiums and reserve requirements like domestic deposits are. The reason? Because U.S. banking branches overseas are competing with offshore banks overseas, which are more attractive to depositors for their leniency.
t’s a competitive world out there in the foreign banking market.