Banks are important for everyone, but millionaires and other high-net-worth (HNW) clients need to be very picky. Rich people have a distinct banking experience since they have more money at stake and the bank has more money to lend them.
Many ultra-wealthy people prefer to operate with a private bank, which can be either an independent firm or a specialized section of a bigger financial institution.
High Net Worth Account Holder Capabilities
Banks are ready to reward you and compete for your business since they stand to profit more from their ties with HNW clientele. Consider these factors as you search around for private banks and other potential service providers.
Larger savings account balances typically entitle account holders to higher annual percentage yields (APY). Compare the rates that various banks offer at various levels, then make a choice. Even if you’re a multimillionaire, you could discover that the safest location to keep your extra cash is an online bank.One benefit of dealing with a financial institution’s high-net-worth customer division is the dedicated service you’ll receive. Access to seasoned professionals with superior customer care abilities and expanded authority to resolve issues for high-value customers.While $35 isn’t out of the question, complimentary services are always appreciated. Large balances in checking accounts typically come with perks including no monthly maintenance charges, free cashier’s checks and stop payment requests, a free safety deposit box, and more. High net worth individuals are not unusual recipients of ATM rebates.Standard bank rules may be onerous for millionaire customers who frequently need to transfer big sums of money, thus 3 higher payment limits are desirable. However, the spending limitations, ATM withdrawal limits, and ACH transfer allowances associated with private banking arrangements are often substantially greater.4 Smarter Borrowing Try to find loans with cheaper interest rates, but don’t count on getting money for nothing. In spite of this, financial institutions are willing to forego origination fees and other closing charges, and to speed up the underwriting process
Even if you don’t fit the typical mold, there’s a chance they’ll make an exception.Companies that used to just cater to the needs of stockbrokers are now vying for your business by offering cash management accounts. Self-directed millionaires would benefit greatly from cash management accounts due to their attractive interest rates and ATM rebates. Additionally, cash management accounts can disperse funds among many banks, allowing for FDIC insurance coverage of more than $250,000 per institution. For instance, the Fidelity Cash Management account can invest up to $1,250,000 in bank partnerships that are covered by the FDIC.6
Read the fine print before opening a cash management account to be sure your money is safe.
Choosing What’s Most Important
The banking industry, for better or worse, makes an effort to make each customer feel special. The term “private banking” is used interchangeably, however there are actually several levels and scopes of service. Identify your priorities before settling on a financial institution. You may receive invites to as many athletic events, galas, and auctions as you can handle, as well as as many complimentary lunches, but the most essential thing is to have your needs satisfied.
Banks are interested in more than just your checkbook. Expect to be pitched on financial and estate planning services, as well as loans for your business needs, since they would like to strengthen their relationship with you.
Millionaire-Friendly Banks
According to the 2020 Euromoney Private Banking and Wealth Management Survey and the 2020 rating by Global Finance, J.P. Morgan Private Bank is the best private bank for HNW U.S. clients. Morgan Stanley Private Wealth Management, Citi Private Bank, Santander Private Banking, and Goldman Sachs Private Wealth Management rounded out the top five in the Euromoney study.78
JPMorgan Chase
The Euromoney survey also ranked this private bank as the best for family office services, investment management, philanthropic advice, and data management and security for both mega- and ultra-high-net-worth clients (those with more than $250 million and less than $250 million in assets, respectively). Chase Private Client, a division of JPMorgan Chase & Co.94, accepts clients with an average daily balance of $250,000 in deposits and investments, while J.P. Morgan requires clients to have a minimum of $10 million in assets.
Goldman, Sachs
Euromoney ranked Goldman Sachs as the best in capital markets and advising, working with the next generation, research and asset allocation advice, and servicing business owners, in addition to its overall second place finish. Goldman Sachs provides private banking services, trust and estate administration services, trading, hedging, and structuring solutions to help HNW clients reduce risk, and more.10
The Private Wealth business at Santander Santander Private Banking International provides a variety of specialized services, such as advice on real estate investments and access to capital. The division’s minimum asset requirement is 20 million Euros per client.11
Citi
Citi not only placed fourth overall, but it also won Euromoney’s award for best private bank for international clientele. Citi caters its services to various clientele, including institutional investors, high-net-worth individuals, family offices, and legal professionals.12
M. S. Morgan & Co.
Morgan Stanley came in at #5 overall, and was also recognized as the top private bank for ESG (environmental, social, and governance)/impact investing, and innovative/emerging technology adoption, among other categories. Signature Access Lifestyle Advisory is a Morgan Stanley product that includes aircraft management and cybersecurity services.13
Questions and Answers (FAQs)
What is the minimum amount for a high-yield savings account?
Private banking institutions have varying minimum deposit requirements. In most cases, hundreds of thousands of dollars are required, if not millions. Customers with less disposable income can, at many of these banks, open limited accounts or gain access to private accounts by paying a charge.
How much money can you legally keep in a savings account?
Theoretically, there’s no cap on how much cash you can deposit in a bank, but that doesn’t mean you should. Each depositor in each ownership category is limited to a maximum of $250,000 in FDIC insurance.14
