Are you concerned about the economic or political stability in your
country? Do you worry that the value of your national currency will
fall? If so, you might want to consider depositing funds in a foreign
bank via Internet Banking.
The relative value of currencies fluctuate over time, due to the forces of
supply and demand. If you are able to maintain funds in a stable or
appreciating currency, you can benefit from the relative changes in
currency values.
Countries that are resourced based such as Australia or Canada, often
perform well when resource prices are high. This impacts their currencies. When oil prices increase, for example, the value of the
"petro currencies" often increase relative to other currencies. In
countries where the inflation rate is high, the local currency often
plummets, sometimes to the degree of becoming valueless.
By opening a bank account in a foreign country, you can sometimes benefit from
changes in relative currency values. Using e-banking capabilities, it
is possible to transfer funds from a local bank to a foreign bank
(electronic funds transfer).
Had you purchased $100 Canadian in January, 2002 (USD $62) that same $100
would have been worth USD $85 in September, 2005. In other words, you
would have earned a tidy 37% profit, in addition to bank interest paid on your
deposit. The Canadian banking system, is among the most stable in the
world.
