XAPO Review – The Best Offshore Bank For Kiwis?

Posted in   Banking, Bitcoin   on  June 3, 2024 by  Money Bren0

Nothing in this article is financial advice. The writer is not your financial advisor. Investing contains risk and you can lose money. Consult your own professionals before making investment decisions. This article may contain affiliate links. 

Xapo Bank REVIEW

Xapo is a registered bank based in Gibraltar which merges Bitcoin and USD banking facilities. Accounts are interest-earning and all deposits are government-insured up to EUR 100,000. Xapo is fully regulated in Europe for banking services and is available to Kiwis as a fully legal offshore banking option.


  • High interest-earning accounts
  • Debit card with no FX fees
  • 0.5% to 1% cashback on all purchases
  • Earn interest on BTC savings
  • Make deposits in USD, GBP, EUR
  • Make deposits in BTC, USDT, USDC
  • Invest in crypto
  • Invest in stocks
  • Both virtual and physical debit cards
  • Deposits insured worldwide up to EUR 100,000


  • $150 annual fee
  • No third party deposits

In the past, I've written numerous posts on why you shouldn't keep all your savings in New Zealand banks.

To jog your memory, there is nothing wrong with New Zealand banks from a safety point of view - the NZ banking industry is stable and generally well capitalised.

However, just like we diversify our investments, we should also diversify our cash and banking.

Here are some reasons why:

  • The NZ dollar is a small/insignificant currency globally, so saving in other currencies is a good idea.
  • NZ bank deposits are only guaranteed up to $100,000 (per bank).
  • Allows you to take advantage of high/low exchange rates (i.e. when the NZD is strong, buy USD, when it's weak, buy NZD).
  • Allows you to take advantage of higher interest rates in other countries.
  • You are safeguarded against a black swan event of the NZD collapsing (has happened in many more countries than you'd expect!)
  • Allows you to get paid in other currencies instead of spending FX fees exchanging everything to NZD.

While there are numerous offshore banking options for Kiwis, I have been using Xapo Bank for my USD banking, and am very happy with them.

In this post, we'll go over how Xapo works and some of the features that make is such a great banking option for Kiwis looking to hold currencies offshore.

What's wrong with Wise?

You might be thinking, why can't we just use Wise or Revolut to bank in USD?

Yes, I use Wise almost every day, have written about them before on the blog and it's a fantastic service.

However, it is NOT a bank in NZ or Australia, and Revolut isn't either.

This means:

  • You don't earn interest
  • The money technically isn't yours (it belongs to Wise/Revolut).
  • It is NOT covered by a banking guarantee.

That means if you have $50,000 USD in your Wise account and they go bankrupt, it's gone.

For foreign currency transfers, travel spending and receiving deposits in foreign currency, it's fantastic, but for actual savings accounts, it is NOT a suitable option.

What is XAPO?

Xapo is a banking service based in Gibraltar, a self-governed British territory in Europe.

It is a politically stable, well-established financial centre with a robust banking industry.

This has made it popular for offshore banking.

New Zealanders can open an account with Xapo and have a regulated USD offshore bank account within 24 hours. All that's required is basic documentation such as photo ID and proof of address.

The unique feature of Xapo is it's designed to be crypto-integrated. This means you can deposit, save and earn interest in Bitcoin, can make deposits on-chain, and invest in crypto right from your standard Xapo USD bank account.

Xapo Features

Interest-earning account

There are several things I love about Xapo, but the best is the accounts are interest-earning.

I've always aimed to keep some cash in USD at all times (since the NZD/USD exchange rate fluctuates a lot) but I've always refrained from holding any more than a few thousand dollars because the money isn't earning anything.

With Xapo, my USD now earns interest with no minimum, and is paid out daily in Bitcoin.

If you're comfortable holding Bitcoin, this is perfect as you are stacking sats on autopilot!

If you prefer USD, your interest is available immediately and can be converted to USD at any time.

You also have access to a BTC savings account, which means your BTC earns interest too (but at a lower rate).

As I write this, USD earns interest at 4.6%, and BTC earns interest at 0.9%.

Stablecoin Deposits

One of the coolest things about a crypto-friendly bank is you can deposit directly in crypto!

Previously, to get money out of crypto and into your bank account, you would need to send it to an exchange, sell it, then withdraw it into a bank account.

This process could take 3-4 days, mostly on the fiat side and cost a ton in fees (gas fees, brokerage fees, withdrawal fees).

With Xapo, this is finally streamlined and you can deposit USDT, UDSC or BTC directly into your account which arrives in minutes (FINALLYYY!)

The stablecoins are converted immediately to USD, saving you from the arduous task of getting your stables off-chain before banking them.

Until now, I've had my stables sitting in DEFI protocols like Aave to earn interest.

Now I can get them into a government-guaranteed bank account within minutes which is simply awesome.

And yes - you can send your USD out of your account via stablecoin transfer too!

This means you can send your USD directly to ETH addresses as USDT or USDC. Amazinggg.

Multi-currency deposits and payments

Along with USDC, USDT, BTC and USD deposits, you can also make deposits in GBP and EUR.

These will be automatically converted to USD upon deposit.

You can also make outward payments in GBP and EUR, which will be converted from your USD balance.

Invest in stocks

Xapo has a built-in stock trading platform where you can invest in most US stocks.

The commission is 1% per trade.

The service is custodial and managed by DriveWealth (the same company used by Sharesies).

This means you can have your USD savings, BTC savings and US stock investments all in one place with Xapo!

Debit card with no FX fees (and cashback!)

Xapo has a debit card you can have issued both virtually and as a physical card.

The card can be used globally and has no FX fees, so it's on par with Wise from a fees perspective.

However, it has the added bonus of cashback!

You will earn 0.5% back on everything you spend on the card, paid to you in Bitcoin at the end of the month.

This increases to 1% with the platinum/metal card.

I do all my travel spending now with Xapo instead of Wise, and love seeing the Bitcoin sats pop up in my account every time I make a purchase!

BTC storage

I will always advocate for holding your own private keys via hardware wallet (I write about this here and also in my course Simple Crypto).

However, the Xapo Vault is a strong second option for people who don't trust themselves to manage their own wallet.

Xapo actually started as Bitcoin custody and storage service, which I first read about in Digital Gold - a book about Bitcoin's origins (highly recommended).

Xapo holds one of the biggest Bitcoin reserves in the world. Because Xapo specialises in Bitcoin storage and has been a pioneer in the space, I would feel much more comfortable holding my BTC here versus an exchange like Binance.

However, as I said, personal cold storage will always reign supreme and be my first recommendation.

Is Your Money Safe In Xapo?

As best as my knowledge on the subject spans, your money is as safe as it would be in an NZ bank.

Gibraltar has a government guarantee on bank deposits similar to New Zealand's, up to EUR 100,000.

From their website: "As a fully regulated bank that is licensed by the Gibraltar Financial Services Commission, your fiat deposits are protected by the Gibraltar Deposit Guarantee Scheme for up to the US Dollar equivalent of EUR 100,000. We also have one of the largest Bitcoin reserves in the world, providing much needed safety for your BTC deposits."

Xapo is a confirmed member of the scheme on the Gibraltar Government Guarantee website:

Note: The government guarantee only relates to fiat (USD) holdings.

Your Bitcoin deposits are not guaranteed by the government of Gibraltar, nor are your stocks or crypto.

I have also confirmed directly with Xapo that foreigners are covered under the scheme:

What are the downsides?

I've listed most of the pros, what about the cons?

There are a couple.

Firstly, the account is not free. The annual fee is $150 USD.

While this is not cheap and discouraged me initially, I found it leads to a better service and allows them to offer more features (which is why the account is so feature-rich). You get a personal account manager, for example. Also, upon doing the math I found it's well worth the fee. In fact, Xapo's service is so unique if the fee was double the price I'd probably still pay it. There's simply no other service like it.

Obviously whether the account is suitable for you depends on your personal situation, but $3,000 USD in the savings account will pay for the fee in interest, so if you have $10k or $20k in savings, the fee is negligible.

The second downside is the account doesn't accept third-party deposits.

For example, if a US client wants to pay directly to your bank account, they can't use your Xapo account. Xapo only accepts first-party deposits, meaning deposits need to come from an account in your name. Therefore, you need something like a Wise or Revolut account if you want to accept third-party USD payments.

Finally, it would be nice if they allowed you to hold multiple currencies. You can deposit in EUR and GBP, but this gets converted to USD upon receipt. I understand why they do this, but holding multi-currency would be a feature I'd like to see in future.

Who is Xapo For?

Xapo is definitely not for everyone, and here's why:

Firstly, there's the obvious barrier of the annual fee.

For some people, this will be worth it many times over, and for some it's a non-starter.

Here's what $150 gets you:

  • Government-guaranteed offshore account
  • Debit card with no FX fees
  • Debit card with 0.5% BTC cashback
  • BTC and USD interest-earning accounts
  • Stock and crypto investing
  • USDC and USDT deposits

If you use crypto regularly, I'm sure you already see how valuable this account will be.

Personally, I've easily spent over $1,000 just getting stablescoins on and off chain and in and out of bank accounts and defi - that includes gas fees, DEX fees, withdrawal fees, exchange fees, brokerage fees and so on.

I've also missed out on thousands in interest from keeping USD in non-interest earning accounts (I had about $7,000 USD in an ASB account for years, waiting for exchange rates to improve).

That alone makes the account worth it.

Also, just $3,000 in the savings account will pay for the annual fee (compared to earning 0% in a foreign currency ASB account, for example).

So who should open a Xapo account?

If you're only planning to keep a few hundred dollars in USD for "just in case" purposes, then Wise is the better option for you.

However, if you're at the stage where you're looking to establish a proper savings account in USD and diversify your cash position, Xapo will be a much better option (remember, Wise is not a bank and its deposits are not guaranteed).

If you're also crypto-involved and use it regularly, then a Xapo account becomes a no-brainer.

As an example, say you'd like to keep $20k of your savings in USD.

An account with Xapo will earn you $920 in interest per year (in BTC).

Not only are you generating income on your savings, and diversifying into USD, you're stacking Bitcoin too!

You also get access to all the other features, such as cashback, crypto trading, BTC savings etc. If you make regular use of the debit card, and the crypto-integration, such as making crypto deposits, or regularly investing in BTC, the account will be worth it many times over. I know it already has been for me.

If you'd like to give the account a try, you can get a free 30 day trial (no credit card needed). You'll also get a free $30 in BTC when you sign up with the link below.

Just click here to get started!

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