An offshore bank offers privacy far beyond what is offered by a normal bank. A normal bank usually have to provide information to local authorities about depositors and their accounts. Most offshore banks come from countries with little or no rules about banking privacy and it is therefore possible for offshore banks to keep their depositor and account information secret.

You might have many reasons for enjoying the offshore banking privacy, some of the most common reasons are:
- To hide the money from family members.
- To hide the money from investment salesmen and others that might be interested in the depositors wealth.
- To avoid publicity and hide from the press.
- To prevent confiscation of money.
- To launder money.
- To evade taxes in the your country.

There is a tendency towards less privacy for offshore banks. The terrorist attacks on September 11, 2001 have involved the international society in the question of offshore banking privacy and accused offshore banking for hosting terrorist funds. Offshore banks might therefore end up being as private as normal banks within a few years.

The increased financial privacy provided by offshore banks is often called 'anonymous banking'.