The risks of banking in Bermuda are limited when compared to the risks of banking in other offshore banking jurisdictions. In fact, Bermuda has a pristine reputation, is not present on any blacklists, greylists, or watchlists, and is widely respected as a financial services jurisdiction.
That said, there are risks to banking in Bermuda if you choose the wrong bank or have a client profile that would be better served elsewhere. In this article, we’re going to help you navigate these risks and share several important factors you should consider before opening bank accounts here.
We will also be answering common questions we receive from our members when considering opening accounts in the banking hub of the British Overseas Territories, Bermuda.
This article is part of our free series on how to open a bank account in Bermuda, which shares unique insights on the country, account opening options for foreign non-residents and entities, available banking services, and much more.
Feel free to use the table of contents to jump ahead to the sections most relevant to you.
Table of Contents
- Risks of Banking in Bermuda
- Is Bermuda Safe for Banking?
- Frequently Asked Questions
- Ready to Open an Offshore Bank Account?
Risks of Banking in Bermuda
There are limited risks to consider before banking in Bermuda, thanks in large part to the centralization of the banking sector, pragmatic regulation, and strong banks. However, there are bank-specific financial risks and client risks that can influence whether Bermuda is a banking jurisdiction worth considering.
Is Bermuda Safe for Banking?
Yes, Bermuda is safe for banking if you choose the right banks, and bankers, and maintain reasonable deposits that match your risk tolerance. That said, like banking in any country, if you choose to engage in high-risk investment practices personally or if the bank you choose to open with starts to engage in irresponsible lending and does not maintain adequate capital and liquidity ratios, it would not be considered “safe”.
These factors are important to consider, especially if you are looking to open an account with a low deposit amount, make frequent swift transfers to send money to Bermuda, or are looking for a remote account opening option.
As mentioned, there are risk factors to consider before banking in Bermuda, which include the limited number of institutions and list of banks in Bermuda available to choose from, the high fees that are often associated with banking here, and bank-specific financial and management risks that you should take into consideration no matter where you bank.
Additionally, while we do not recommend relying on deposit insurance in any country, it’s worth noting that Bermuda’s deposit insurance only covers USD 25,000. This is 10% of the total deposit typically required to open an account.
Bank-Specific Financial & Management Risks in Bermuda
Not all Bermuda banks are created equal. This is a given. Certain banks have better financial management, easier onboarding procedures and Bermuda banking requirements, are better capitalized, and are worth considering over others. In Bermuda, this is less of a problem because there are only four banks in the entire country.
That said, it’s still important to compare the banks opening fees and Bermuda banking costs since each bank has its own fee structure, including maintenance and activity fees.
However, the biggest financial companies and largest banks in Bermuda do have a broader network of services and a bigger international footprint, which means more assets and a more robust suite of services for their clients. So, whether you are looking to open an individual deposit account, Bermuda personal bank account, business account, or even a private account, there are options worth considering.
In fact, when the right bank is chosen, there are certain account advantages and Bermuda banking benefits to access, which you can learn more about by clicking here and accessing our free guide.
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Frequently Asked Questions
Below are a few of the most common questions we receive from people asking about the risks of banking in Bermuda. If you have further questions you would like us to answer, don’t hesitate to contact us directly.
What Are the 3 Types of Risks in Banking?
The 3 types of risks in banking include reputation, compliance, and credit. That said, certain risks are more heavily weighted in certain offshore banking jurisdictions than others. For example, banking in Panama has a considerably higher reputation risk than opening foreign accounts and offshore banking in Bermuda. This is because Panama is blacklisted by most major regulators while Bermuda is not.
Can I Open a Bank Account in Bermuda?
Whether you can open a bank account in Bermuda depends on your citizenship, residency, the account management support and Bermuda banking services you require, and your initial deposit. That said, it will also depend on whether you’re looking to open a private account, personal account, account for company funds, or a Bermuda business bank account. However, the top-rated banking providers and the best banks in Bermuda have experience in working with foreign non-resident individuals and entities. That said, deposits are generally higher than other banking jurisdictions and banks tend to cater to clients seeking specialized financial support and Bermuda private banking.
Who Regulates Banks in Bermuda?
The Bermuda Monetary Authority (BMA) regulates banks in Bermuda. The main role of the BMA is to regulate financial services in Bermuda. It regulates all banks in Bermuda, manages exchange controls, and even issues the Bermudian Dollar (BMD), the currency of Bermuda.
Ready to Open an Offshore Bank Account?
If so, you can access GlobalBanks Insider and start the process of applying for an offshore account in a few clicks.
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And “yes!” GlobalBanks Insider is designed to help foreign and non-resident individuals and companies open bank accounts.
Use this link to see how GlobalBanks Insider can help you successfully open accounts.
