Private Banking

Updated on April 8, 2024
Article bySusmita Pathak
Reviewed byDheeraj Vaidya, CFA, FRM

What is Private Banking?

Private banking refers to a type of banking and financial service offered by certain banks only to high-net-worth individuals (HNWIs). Clients opting for this service are individually assigned a financial representative who personally takes care of their banking needs

Key Takeaways

  • Private banking is a form of banking service in which the HNWIs get a dedicated financial representative who manages their banking and financial matters. This facility is available only to high-net-worth individuals (HNWI) who have a certain minimum amount of investable assets.
  • The services offered by a private banker differ as per banks. Some of it includes banking transactions and providing discounted rates on loans and investment. Some banks also provide asset investment, mortgage advice, tax, and estate planning.
  • Certain banks also offer personalized investment and tailored schemes to help their HNWI clients preserve and grow their wealth.

How does Private Banking Work?

  • A high-net-worth individual (HNWI) possesses wealth more than the average population. According to a World Wealth Report, to be an HNWI, the investable assets must be USD 1 million or beyond. The amount above excludes primary residence and consumables. However, different banks have unique criteria for determining a high-net-worth individual. As such, the threshold differs amongst the banks.
  • Given the size of their assets, HNWI individuals need a private banker to oversee their banking activities without undertaking them personally. Also, many banks offer huge bonuses, discounted transactions, lower loan rates, and higher returns.
  • The private banker is aware of the financial condition of the HNWI client. Many banks offer advice on asset investment to help preserve and grow the client’s wealth. They also suggest schemes that could prove to be tax-saving and profitable. Depending on the services offered, clients are also informed on tax management services that emerge now and then.
Private Banking

You are free to use this image on your website, templates, etc, Please provide us with an attribution linkHow to Provide Attribution?Article Link to be Hyperlinked
For eg:
Source: Private Banking (

Financial Modeling & Valuation Courses Bundle (25+ Hours Video Series)

–>> If you want to learn Financial Modeling & Valuation professionally , then do check this ​Financial Modeling & Valuation Course Bundle​ (25+ hours of video tutorials with step by step McDonald’s Financial Model). Unlock the art of financial modeling and valuation with a comprehensive course covering McDonald’s forecast methodologies, advanced valuation techniques, and financial statements.

Steps Involved in Private Banking

  1. Eligibility is the first step in getting a private banker and enjoying hassle-free banking through customized financial services.
  2. As previously mentioned, to be classified as an HNWI, one must have a minimum investable asset of USD 1 million. However, the figures can vary depending on the banking institution.
  3. After the eligibility requirements are met, high-net-worth individuals are assigned a private banker.
  4. The representative handles everything on behalf of its client, from knowing their financial ownerships to depositing checks.
  5. Certain banks help their clients achieve long-term financial goals through professional advice and recommendations.


Thomson has decided to move from a rented apartment to a house in Switzerland. However, the installments seemed to cost him an arm and a leg. As a high-net-worth client, he contacted his private banker. His dedicated representative informed Mr. Thomson of the lower mortgage interest rates he was entitled to as an HNWI. After that, everything became a lot easier for him to handle. Mr. Thomson applied for a mortgage and bought the home of his dreams.

Many banks are offering this service around the globe. Some of the leading names in private banking include Bank of America, Morgan Stanley, UBS, Credit Suisse, J.P. Morgan, Citibank, and Goldman Sachs. In 2019, Citi Private Bank was awarded the Best Global Private Bank at a prestigious international banking award.

Is Private Banking Worth It?

It is a concept designed, developed, and implemented keeping in mind the customers’ convenience. Customers who trust a banking brand are more likely to deposit and invest without hesitation. Therefore, these services have been implemented to reward the loyalty of such high-net-worth clients.



This has been a guide to private banking and its meaning. Here we discuss how it works, steps, examples, advantages, and disadvantages. You may also have a look at the following articles to learn more –