Banks are essential for everybody, but millionaires and other high-net-worth (HNW) customers need to be especially choosy about the banks they choose. With more money at stake—and more money at the disposal of the bank—the experience is quite different for wealthy individuals.
Many HNW individuals choose to work with a private bank—either a stand-alone company or the private banking division of a larger banking corporation—that focuses on the management of wealth.
Account Features for HNW Customers
Banks stand to earn more off of their relationships with HNW clients, so they’re eager to reward you and compete for your business. As you shop for private banks and other companies you feel could meet your needs, compare these features.
- Higher APY: With a significant savings account balance, you should be eligible to earn more—a higher annual percentage yield (APY)—on your deposits. Evaluate how much banks pay at different levels and shop around. But you may find that, even as a millionaire, online banks are the best place for idle cash.
- Dedicated customer service: Most financial institutions have specialized departments for HNW customers, and it pays to work with those teams. You get access to experienced individuals who have excellent customer service skills and are more empowered to solve problems for high-priority clients.
- Free services: Although you can afford to pay $35 for a wire transfer, it’s nice to get things for free. With a sizable account balance, you should automatically enjoy no monthly fees, free cashier’s checks, free stop payment requests, a safety deposit box, and more. ATM rebates are more or less standard for HNW customers.
- Higher payment limits: Standard bank rules may be inconvenient for millionaire customers, who often need to move large sums. But private banking arrangements typically allow for much larger debit card purchases, higher ATM withdrawal limits, and generous ACH transfers.
- Better borrowing: Look for lower interest rates on loans, but don’t expect free money. Still, banks are willing to waive origination fees and other closing costs, as well as move your application through underwriting quickly. They might even make exceptions when you don’t fit the standard profile.
- Cash management accounts: Some firms that traditionally served brokerage needs now want your banking business. Cash management accounts, with competitive interest rates and ATM rebates, are ideal for millionaires who prefer to manage their finances themselves. Plus, cash management accounts can spread funds among multiple banks to provide more than $250,000 of FDIC insurance in a single account. For example, the Fidelity Cash Management account uses bank partnerships to place up to $1,250,000 in FDIC-insured accounts.
If you choose to use a cash management account, read all of the details to ensure all of your money is protected.
Setting Your Priorities
For better or worse, banks go out of their way to make you feel important. They use prestigious-sounding names, but “private banking” comes in various tiers and means different things. Determine what you value before selecting a bank. You may get invitations to sporting events, galas, and auctions—and all of the free lunches you can stand—but the most important thing is to get your priorities met.
Banks don’t just want your checking account. They’d prefer to deepen the relationship with financial and estate planning, and they’d love to lend to you for any business needs, so expect a few sales pitches.
Top Banks for Millionaires
The best private bank for HNW U.S. customers, according to both the 2020 Euromoney Private Banking and Wealth Management Survey and the 2020 ranking by Global Finance, is J.P. Morgan Private Bank. The rest of the top five in the Euromoney survey were Goldman Sachs Private Wealth Management, Santander Private Banking, Citi Private Bank, and Morgan Stanley Private Wealth Management.
The Euromoney survey also named this private bank the best for mega-high-net-worth clients (those with more than $250 million in assets) and ultra-high-net-worth clients (those with more than $30 million but no more than $250 million in assets) as well as the best for family office services, investment management, philanthropic advice, and data management and security. J.P. Morgan requires $10 million in assets to become a customer, but those with an average daily balance of $250,000 in deposits and investments are eligible for Chase Private Client, which is also part of the larger banking company JPMorgan Chase & Co.
In addition to its second-place showing overall, Goldman Sachs was named best for capital markets and advisory, working with the next generation, research and asset allocation advice, and serving business owners by Euromoney. In addition to its private banking services, Goldman Sachs offers trading, hedging, and structuring solutions to help HNW clients minimize risk as well as trust and estate administration services.
Santander Private Banking International's Private Wealth division offers a range of boutique services including real estate advisory and financing solutions. The division requires clients to have a minimum of 20 million euros in assets.
In addition to its fourth-place showing overall, Citi was named best private bank for international clients by Euromoney. Citi provides different services targeted at different types of clients: professional investors, wealthy individuals, family offices, and lawyers and law firms.
In addition to its fifth-place showing overall, Morgan Stanley was named best private bank for the super affluent (those with $1 million to $5 million in assets), ESG (environmental, social, and governance)/impact investing, and innovative or emerging technology adoption. Morgan Stanley offers Signature Access Lifestyle Advisory services, including aircraft management and cybersecurity.
Frequently Asked Questions (FAQs)
How much money do you need to open a private bank account?
The amount required to open a private bank account varies by institution. You'll usually need at least several hundred thousand dollars, if not millions. However, many of these institutions offer options for customers with less money to open more limited accounts or access private accounts for a fee.
What is the most money you can have in a bank account?
Although there is no limit to the amount of money you can put in a bank, it's not necessarily wise to keep piling money into savings accounts. FDIC insurance only covers $250,000 per depositor per ownership category.