Private banking can be a good fit for people who have a high net worth and want to consider their financial options for wealth building. It can also be a way to access additional perks and benefits.
What is private banking?
Private banking provides high-net-worth individuals with special cash and wealth management services. That can include exclusive access to bank rewards, more personalized service for day-to-day banking needs, more convenient foreign currency exchanges and deposits, tiered interest rates and increased withdrawal and mobile check deposit limits.
How much money do I need to qualify for private banking?
The wealth or asset requirement depends on the bank, and can sometimes be in the range of hundreds of thousands of dollars. However, there are often ways to be eligible even if you don’t have a high net worth, such as by paying a hefty monthly or annual fee.
The Chase Private Client Checking account, for example, charges a $35 monthly fee, but that fee can be waived with an average daily balance of $150,000 across your Chase accounts. The BB&T Vantage Checking account — offered to BB&T Wealth clients — charges a $50 annual fee that can be avoided with a $25,000 checking account balance or $100,000 balance across multiple deposit and loan accounts with BB&T.
Is private banking worth it?
It depends on what you value from your bank. At its core, private banking offers essentially the same functionality as a regular bank account. However, customers also get the perks of priority customer service and access to other premium benefits like a personal wealth advisor and higher spending and withdrawal limits.
As far as drawbacks go, these accounts might not have the best interest rates, and you’ll typically be charged a high monthly fee if you don’t meet the minimum balance requirements. Be sure to investigate the best high-interest accounts that are available outside of private banking before you decide to open a new account.
What are the benefits of private banking?
Access to wealth advisory services. Customers can get advice on how to create strategies for not only their banking needs but also estate and trust planning, investments and credit.
Potentially better customer service. Institutions that offer private banking tout higher-priority customer service for their clients. Services can include free deposit boxes, free rush shipping on replacement debit cards, access to private special events and a personal dedicated banker to help with your day-to-day banking needs.
Streamlined accounts. Since private bank accounts seek to provide wealth management solutions and advice, you may be able to link multiple kinds of accounts to make investment transactions more convenient.
Higher daily limits. Your private bank account may give you higher limits for mobile check deposit, spending and ATM withdrawals than a typical bank account.
Bragging rights. Much like a sports car or black credit card, owning a private bank account can feel like a status symbol.
Are there any drawbacks to private banking?
Interest rates may be better elsewhere. Despite the bells and whistles when it comes to customer service, private banking options can fall short in terms of interest rates.
You may have to pay a high monthly fee. If you don’t meet certain balance or asset requirements, you may end up on the hook for a high monthly fee. There are plenty of banks that offer free checking accounts, so consider the potential long-term costs of opening a private bank account if you’ll have to pay monthly service fees.