There are a lot of perks to having a private bank account, from wealth management and retirement planning to special financing for yachts, art, and other high-end purchases.
But as attractive as a private bank account may seem, there are some things to be wary of when opening an account.
Read on in this article to learn the essentials of private banking. The benefits, the risks, and the best places in the world to go to open a private bank account.
Private Bank Account
A private bank account, also known as a wealth management account, offers high-net-worth individuals specialized banking services. This includes financial planning, tax planning, investment products, and more. Find out how to access private banking and where to find the best banks below.
Opening a private bank account can be tricky. Especially if you don’t know which banks specifically accept your client profile.
Fortunately, in this article, we’re going to share everything you need to know to start opening a private bank account as a foreign non-resident.
Here’s a look at everything we’ll cover in this article…
Table of Contents
- Who Should Open a Private Bank Account?
- Risks of Opening a Private Bank Account
- Benefits of Opening a Private Bank Account
- Where to Open a Private Bank Account
- How to Open a Private Bank Account Today
Additionally, we’re going to share how you can open a private bank account and start unlocking the benefits today.
But, before diving in, if this is your first time visiting GlobalBanks, don’t forget to download your FREE Private Banking Starter Guide. It’s designed to help you navigate the complexities of private banking while unlocking as much value as possible.
Who Should Open a Private Bank Account?
Opening a private bank account can be expensive. And high minimum deposits are just one way that private banks filter for their ideal clients.
Clearly, private banking isn’t for everyone.
Here’s a look at the typical client profiles that can benefit from opening a private bank account…
Individuals Who Should Open a Private Bank Account:
- High-net-worth individuals (with an annual income of at least US $250,000)
- Individuals from countries that are frequently black or gray-listed, which we call the Unlucky Passport Club
- Individuals with well-established trusts
- Individuals with foundations
- Offshore entities for wealth planning purposes
- Foreign companies & estate planning structures
- Individuals in need of tax advisory, real estate financing, or investment strategies
Now, although a private bank account is generally for wealthy individuals, not all banks will accept you solely on the amount of cash you can deposit.
You will still need to pass their due diligence procedures. And on top of that, some banks require you to hold a certain amount of liquid assets, such as stock or bond portfolios to open an account.
That said, regardless of the form, you’ll typically need to be able to deposit or invest between US $500,000 to $1,000,000.
Anything less and you’ll likely be turned away.
But for good reasons. Because without sufficient funds, one won’t be able to support ongoing account or management fees or be able to fully take advantage of the services offered.
So, before applying, make sure you meet the bank-specific requirements, fit the bank’s preferred client type, and can meet the required deposit level.
Now, let’s look at the main benefits of opening a private bank account, to see what you’ll be getting for your money.
Benefits of Opening a Private Bank Account
Opening a private bank account can enable you to unlock a number of exclusive benefits and special treatment.
With private banking, you will have your own personal banker. By default, this means attentive and customized service. Private bank accounts can also offer discounted rates on investment products and a long list of wealth management services.
But, that’s not all…
Benefits of Opening a Private Bank Account:
- Dedicated account representative
- Personalized services
- Assistance in planning for retirement
- Personal investment strategies
- Customized financing options & planning advice
- Portfolio management (personal & business)
- Estate planning
- Discounted pricing on products and services (when negotiated properly)
- Specialized loans & line of credit
- Attractive interest rates (mortgages)
- Investment opportunities (different from a regular bank account)
- Business private banking options are available
- And more…
Of course, benefits will differ from bank to bank.
So, before you begin applying, it’s important to understand what services a bank offers and if they are available for your particular client profile. This way, you can decide whether or not it is the best private bank for you.
Risks of Opening a Private Bank Account
As mentioned above, private banking isn’t for everyone.
The fact is, for many foreign non-resident clients, opening a private bank account can be a risk. And, depending on your financial situation, that risk may not be worth taking.
So, before you start applying and depositing a significant chunk of wealth, you should understand the potential risks you face with a private bank account.
Risks & Challenges of Opening a Private Bank Account:
High Management Fees:
You will pay fees wherever you bank. Whether it’s with a regular bank or a private bank. However, a private bank account typically comes with higher management fees than any other types of accounts.
For instance, these management fees can be a combination of monthly services fees, charges on your investments, and fees for falling below your minimum account balance.
So, it’s important to you understand the bank-specific fee structure before applying. This way, you can determine if you’re able to afford to hold a private bank account in the long term.
Meeting Private Banking Requirements:
Opening a private bank account isn’t just about handing over a large portion of your wealth to the bank. In fact, there are other requirements foreign non-residents need to meet.
In addition to the initial deposit, some banks only accept clients of certain citizenship and residency. While other banks will only consider opening a private bank account for certain companies and holding structures. Or, those with ties to the country in which you decide to bank in.
So, before applying, make sure you understand the bank-specific requirements. This way, you’ll be able to confirm whether you’re eligible to open a private bank account or not. Otherwise, you’ll end up wasting time and money applying to the wrong banks.
Turnover of Private Bankers:
Private banks tend to have a high employee turnover rate. Which causes strain on clients to decide between the bank and the banker. In many cases, clients will want to move with the private banker instead of staying with the bank because of the personal relationship that has been established.
Unfortunately, sometimes clients may not have a choice. Instead, they may find themselves forced to stay with the bank.
This can be a huge headache for clients as they have to build new relationships and learn to trust their new private banker with their long-term investments.
So, before you open a private bank account, check what restrictions there are on exiting the account.
On top of these challenges, here are a few more that you should be aware of…
Other Risks & Challenges Of Opening a Private Bank Account:
- Assets may be held in foreign structures
- You may not be familiar with foreign investments
- Limited investment products
- Regulatory constraints
There are many risks and challenges to opening a private bank account, so take time to know what you’re getting into.
Also, note that a lot comes down to where you’re banking. So now let’s go over some of the best places to open a private bank account.
Where to Open a Private Bank Account?
An important factor to consider when deciding whether private banking is right for you is where you want to open. Or, more importantly, where you can open.
So, with that said, below are a few banking jurisdictions where foreign non-residents can open private bank accounts…
That said, where you can open, depends highly on your client profile, how much money you can deposit or invest, and what services you’re looking to tap into.
And most importantly, the requirements you can meet.
With this in mind, let’s take a closer look at two of these private banking hubs…
Open a Private Bank Account in Singapore:
Singapore is well known for having the best managed, financially sound, and conservative banks in the world.
But, that’s not all.
These high-quality services come with a high price tag. To open a private bank account in Singapore, you need to invest a minimum of $2 million and meet strict bank-specific requirements.
Luckily, we detail the entire Singapore account opening process for foreign non-residents including the specific bank requirements you need to meet in our premium members-only report “Banking in Singapore: Global Banking at Its Best (And How To Get In)”.
Open a Private Bank Account in Andorra:
Compared to many other private banking jurisdictions, Andorra is an extremely affordable option for many foreign non-residents looking to enter the world of private banking. And, with only a US $100,000 deposit required, many foreign non-residents can open a private bank account without much hassle.
Of course, you’ll need to know which bank, banker, and branch to contact to successfully open.
Fortunately, we detail the entire Andorra account opening process including who should bank here, risks of banking, and specific banking options to consider in our premium members-only report “Banking in Andorra: Accessible European Private Banking”
How to Open a Private Bank Account Today
As mentioned above, private banking isn’t for everyone.
But, that doesn’t mean it can’t be an option for you in the future.
So, if you’re looking for more information on how to open a private bank account, we’ve got you covered.
We detail everything you need to know about private banking in our premium members-only report “Private Banking Secrets: Make Money Like the Super Rich”.
This report not only details who can open a private bank account, but also how these particular client groups can benefit and unlock attractive services they likely can’t get anywhere else.
Lastly, we detail the entire account opening process. Including how to get started, strategies to overcome account opening challenges, and suggestions on the best banks to consider.
So, if you’re ready to get started, we can help…
Ready to Start Opening?
Whether you’re ready to open a private bank account today or you’re just starting to explore your options, we can help.
GlobalBanks IQ gives you everything you need to start finding and opening accounts.
When you join GlobalBanks IQ, you immediately unlock the entire GlobalBanks Database of international banks. It’s home to 250+ banks in 50+ countries.
And, you get access to our library of premium (members-only) reports. These include proven account opening strategies, country-specific banking options, and lists of banks for specific client types.
Plus, you unlock our account opening checklists, dedicated account opening alerts, and much more.
To get started, click here to see if GlobalBanks IQ is the right choice for you.