Are you interested in learning more about how private banks work? Let’s start with a definition: private banks provide banking services to high net worth individuals and families. In fact, most private banks require people or families to meet particular minimum net worth requirements in order to receive private banking services.
Private banking originated in Europe during the 1600s. Historically, private banks were set up to provide banking services to wealthy agriculturalists, business people, or even royalty. Switzerland, in particular, became a center of private banking and a source of financial refuge during periods of strife such as World War I and World War II.
Wealthy individuals and families found several aspects of private banking appealing. These aspects included a high degree of personal attention as well as privacy, secrecy, and in some cases protection from taxes. Private banking, as opposed to public or retail banking, delivers services to its wealthy clients through dedicated bank advisors. Typical net worth requirements are on the order of $2 million, however some private banks will open accounts for much less.
Private banking can provide services such as:
- Wealth management
- Checking and savings accounts
- Tax planning and tax minimization
- Estate and inheritance planning
Therefore, if you or your family are very wealthy, perhaps a private bank or private banking services such as those listed above might be right for you.