While there is no perfect place, the better countries are easy to choose: they must have banking secrecy, no withholding taxes for foreigners, or if there is a withholding tax, it must be easily avoided as it is in Austria or Switzerland by means of a "fiduciary account". A fiduciary account is simply an account established for you at another bank by your own bank, and kept in the bank's name.

Also important , is political stability, an unblemished history of honest dealings with foreign investors, and a long tradition of no government confiscation of private assets. There must be no information exchange treaties or other arrangements with your home country and none on the horizon. Obviously the bankers of your banking country should be fluent in your language. Fortunately, English is the universal language of international banking, business and the airways as well. So unless you bank strictly locally, any major international or offshore bank will have officers that you can communicate with in English.

Outside of Europe, it is probably best to deal only with a branch of a major bank whose home base is not your home country. Your offshore bank preferably has no branches in your home country that could be pressured to force them to reveal your account details or worse yet, freeze your account.

Thus if an Englishman was going to have an account in the Caribbean, first choice might well be a Swiss, Danish or Dutch bank - never a British nor (for safety's sake) a one horse local outfit. The account for a Brit for instance should be in the Antilles (Dutch) not Cayman (British) If I were an American I'd stay far away from any de facto American colony like Puerto Rico or Canada, or any American bank like Citibank, Bank of America etc. Come to think of it, even if I were not an American, I'd stay far away from American Banks no matter where located. They are all quite shaky. The Federal Deposit Insurance Corporation is insolvent and American Banks (and stockbrokers) are generally subject to the whims of the current political administration at home. The largest banks in the country, Continental Illinois and Bank of America, went through the equivalent of insolvency in recent years. The same instability would be true of all but the biggest Japanese banks.

Never deposit two pence in a third world bank like Banamex (Mexico), nor any Arab bank; and remember BCCI (Pakistan)? The Muslim idea of banking is so foreign to the English speaker that there is no common ground. Receiving interest from a bank (or paying interest under some interpretation of Islamic Law) is an offense that gets your hands amputated or in some countries you might be shot. I am not joking. This is the law in Iran. I would not deposit my money in any offshore branch of a bank with such rules in the home country. As to general morality and honesty, some Mexican bankers I have known make Jesse James and John Dillinger look like honest men in comparison to them. And while I'm throwing stones, the Mexican Government has a long tradition of luring in foreign investment and then confiscating it. That leaves the major European banks as just about the only serious choices for stashing serious money. The best countries are Britain's offshore islands, plus Luxembourg, Switzerland and Austria. Austrian banks and Savings Institutions will even open a totally anonymous passbook account where the bank itself doesn't know the customer's name and address.

Banks of ex-communist countries are now courting this offshore private investor business, and there are plenty of banks pumping for "High Net Worth Private Clients" in places like Hong Kong, Panama, Costa Rica, Malta, Uruguay and Gibralter. The vast majority of people and politicians of most of these countries are leftist, as in Mexico and most of South America. When times get tough, the local politicians think first of defaulting on their international obligations and second, of confiscating the local assets of foreign depositors and investors.

Where does one get the best interest rates and management?: In recent years, interest rates in most countries have gyrated from double or even triple digits to low single digits. The "true rate of return" is generally considered to be the interest paid less the (anticipated) local inflation rate, less withholding taxes. Thus when the rate of interest, for instance, in the USA is below 12%, with 6% inflation and a 6% effective tax the American investor gets a negitive return.

In 1992-93, some first class German banks paid 10% per annum interest with no withholding tax and historically low inflation. This is an all time high for Germany where the inflation rate since 1945 has been under 3% per annum in most years, and there is no withholding tax on interest paid to foreigners. In the US, for instance, during the same period, where infltion has averaged around 10%, interest rates hit below 4%, an all time low. Thus the important thing to remember is to read the financial papers, keep up with news.

Place your funds in bonds or for nice long periods like a year or more when you are convinced that interest rates are peaking out. If you buy medium to long term bonds, when interest rates go down again, you can sell the bonds at a big capital gain. Some investment letters have a good record at recommending when to get in and out of bonds.

One reason that people are afraid of making a deposit or buying a bond in a foreign currency is the "currency risk". As long as the interest rate is good, you do not have to reconvert on the sale of the bonds to the original currency with which you bought the bonds until that currency shows a profit advantage to do so.

The pound sterling is recommended by many in the world, and it is possible to have your deposit account held in sterling even with foreign banks - in fact you often have a choice of different currencies in which to hold your account.

To make exceptional yearly interest rates on your account you first need a reasonable interest rate from the bank; have no withholding tax deducted, and thirdly play the exchange rates to add to your profit. We know of no bank anywhere that offers a 20% interest rate, so to aim for an overall interest rate of 20% plus requires the careful investment in good bank rate, no tax on interest, and play to your advantage the exchange rate differences when converting from one currency to another.