Savers struggling to achieve a decent return on their money are increasingly having to spread their net far and wide - so far, in fact, that many have ended up offshore.

Image: Not a confident swimmer, Kenny hoped the water wasn’t too deep

Once thought to be of interest only to the super-rich, offshore savings accounts have now shaken off their playboy image to be embraced by savers both well off and considerably less so.

Like their onshore cousins, there is often the choice between notice and no notice accounts, taking annual or monthly income, and fixed or variable rates of interest.

However, other features are also usually apparent that will prove beneficial to certain savers.

Money can normally be deposited and withdrawn in a wide number of currencies, which is helpful to those that work abroad.

Meanwhile, the tax regulations surrounding such accounts can prove beneficial too.

Interest is paid gross, leaving the saver to disclose it for income tax purposes themselves. This provides the opportunity to defer the declaration, leaving interest to be made on the larger non-tax deducted sum.

Forgetfulness or perhaps something more sinister means some people fail to declare their liabilities at all.

However, it is a situation that has not passed the attention of HM Revenue & Customs (HMRC) and those with money offshore have been urged to come clean over any outstanding tax.

Indeed, HMRC has recently revealed details of an amnesty during which savers can settle their overdue liabilities at a more favourable penalty rate than usual.

The so called New Disclosure Opportunity runs from 1 September this year to 12 March 2010, but once the window shuts, those that have chosen not to come forward will suffer considerably higher fines and the possibility of criminal proceedings.

What is more, HMRC now has the power to sift through and check the offshore records of 300 banks and of their customers too.

So while offshore savings offer a great alternative to the more traditional savings account, it’s up to you to make sure you stay out of deep water.

Tim Leonard, Senior Reporter, Moneyfacts Group