How Do Rich People Pick Their Banks? (2024)

Cindy Lamothe

·4 min read

How Do Rich People Pick Their Banks? (1)

Rich people don’t just put their money anywhere. Unlike regular consumers, they are likely to be more selective of where they choose to bank. Since they tend to have more assets, they’re especially drawn to more personalized services with more features, account options and access to a private banker, which are all perks that most banks offer when your assets grow.

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Below are some of the ways the rich choose their banks and where to place their wealth.

Private Banks

Private banking caters to wealthy individuals, providing them with a range of financial and wealth management services. What this means is that compared to regular banks these offer a high level of personalized attention and service, working closely with clients to understand their financial goals and helping them create custom solutions.

These banks might provide investment advisory, estate planning, tax optimization and risk management. These services are especially appealing as they help the ultra-rich grow and preserve their wealth.

Private banks also offer high-value financing for assets like aircrafts, yachts and real estate, with some banks even offering asset and lifestyle management rather than just financial products.

Another reason rich people will choose private banking is for privacy reasons. Private banks keep strict confidentiality for their clients and they take cybersecurity seriously.

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They Go With Big Names

Rich individuals opt for well-known brands to meet their banking needs.

Established and well-known banks have a long history and a strong reputation for financial stability and security. Rich people often prioritize trust and reliability when selecting a bank to safeguard their assets.

Many well-known banks also have a global presence, making it easier for wealthy individuals to access their funds and financial services from anywhere in the world. This is particularly important for those who do a lot of international business or travel frequently.

Specialized Services

Private banks such as TD Wealth Private Client Group provide wealthy individuals with a dedicated relationship manager who helps with all of their banking and financing needs. This bank also has a lower threshold than most banks, at $750,000.

Banks such as Wells Fargo’s The Private Bank require a $1 million account balance to open with them, but they offer a team-based approach for wealthy clients, meaning a whole team will be dedicated to their account.

Investment Management

When it comes to banking and investing, the rich and ultra-rich are less risk-averse and aren’t afraid to place the bulk of their wealth in the market. A typical millionaire household in the United States, for example, holds 65% of its wealth in stocks, 25% in bonds, and 10% in cash, according to a study by Vanguard. Many rich individuals keep their wealth in stocks, mutual funds and retirement accounts.

Placing wealth in the market offers high liquidity, allowing investors to buy and sell assets relatively easily. This liquidity ensures that the ultra-rich can access their wealth when needed. Many rich individuals may also hold index funds since they earn decent returns and you don’t have to spend time managing them.

When selecting their banking, rich people will prioritize savvy investment management that isn’t always found at private banks; an advisor can help them define an investment strategy and align financial goals.

Enhanced Perks

Banks like Morgan Stanley offer enhanced perks for their wealthy customers. Clients with at least $2 million invested get perks such as special travel rates, discounted concert tickets and cash back on new car purchases. Meanwhile, Citi Private Bank offers eligible clients services such as aircraft financing, investing, escrow, agency services, art advisory and finance and philanthropic strategies.

Networking Opportunities

Networking is a crucial skill for building wealth. Private banks such as UBS Wealth Management have specialized services for ultra-rich individuals and their families, with a $100 million minimum. Not only do they give access to wealth advisors who help with curating portfolios, estate planning and legacy plans — they also provide something most typical personal banks won’t: exclusive networks that allow customers to get in touch with other rich clients who share the same interests and passions.

Wealthy people often seek to leverage their existing personal and professional relationships. They understand that their current network can introduce them to valuable opportunities when it comes to investments or business partnerships. For this reason, they’re more likely to put their money in banking institutions where they can expand these connections.

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This article originally appeared on GOBankingRates.com: How Do Rich People Pick Their Banks?

How Do Rich People Pick Their Banks? (2024)

FAQs

How Do Rich People Pick Their Banks? ›

Private banks also offer high-value financing for assets like aircrafts, yachts and real estate, with some banks even offering asset and lifestyle management rather than just financial products. Another reason rich people will choose private banking is for privacy reasons.

What type of banks do rich people use? ›

“Many millionaires opt for private banking services that provide personalized attention and a dedicated relationship manager. Wealth management accounts may include a suite of financial services such as investment management, estate planning and tax advisory,” she added.

Why do rich people use Wells Fargo? ›

Wells Fargo Private Clients receive personalized wealth planning, investment management, trust services, and private banking. Additionally, clients with unique assets, such as small businesses, oil, gas and minerals, and investment real estate, enjoy access to hands-on management from experts in these niches.

Where do millionaires keep their money if banks only insure 250k? ›

Millionaires don't worry about FDIC insurance. Their money is held in their name and not the name of the custodial private bank. Other millionaires have safe deposit boxes full of cash denominated in many different currencies.

What is the minimum for JP Morgan Private Bank? ›

For example, the Bank of America private bank minimum requirement is $10 million. The minimum requirement to open a private banking account with HSBC in the US is $5 million, while the minimum for banks like JP Morgan is $10 million.

What bank do most millionaires use? ›

What are the banks that millionaires work with?
  • JP Morgan Private Bank.
  • Bank of America Private Banking.
  • Citi Private Bank.
  • Wells Fargo Private Bank.
  • TD Bank Private Bank.
  • Goldman Sachs Private Wealth Management.
  • Santander Private Client.
  • Morgan Stanley Private Wealth Management.
Nov 7, 2023

Where do billionaires do their banking? ›

Private Banks

These services are especially appealing as they help the ultra-rich grow and preserve their wealth. Private banks also offer high-value financing for assets like aircrafts, yachts and real estate, with some banks even offering asset and lifestyle management rather than just financial products.

What is the best bank for high wealth individuals? ›

Citibank's Citigold Private Client (CPC) program has been named the "Best Bank for High-Net-Worth Families" by Kiplinger's for five consecutive years. This prestigious recognition highlights Citibank's commitment to providing exceptional service and comprehensive wealth management solutions to affluent clients.

What is the minimum amount for Wells Fargo private wealth? ›

The Private Bank CD requires a $500,000 minimum opening deposit and a minimum of $500,000 in money new to Wells Fargo.

Is Chase bank for rich? ›

Key takeaways

You typically need a minimum $1 million in investments or assets to become a client with a bank that caters to high-net-worth individuals. Chase Private Client is an exception, requiring only $150,000 to become a client.

Is it bad to keep more than $250,000 in one bank? ›

It's also important to keep FDIC limits in mind. Anything over $250,000 in savings may not be protected in the rare event that your bank fails.

What are the three things millionaires do not do? ›

Millionaires prioritize avoiding consumer debt, making wise financial decisions, and aligning spending with long-term goals.

Can anyone get a J.P. Morgan account? ›

To open a Investments by J.P. Morgan account, you need to be at least 18 years old and have a valid Social Security number and U.S. home address.

What is the best private bank? ›

J.P. Morgan Private Bank is named 2024's “World's Best Private Bank” for the fifth year in a row. For its ninth annual World's Best Private Banks Awards, Global Finance Magazine ranked J.P. Morgan Private Bank* first overall.

How much does a JP Morgan private bank advisor charge? ›

How Much Does J.P. Morgan Personal Advisors Charge? J.P. Morgan Personal Advisors charges between 0.40% and 0.60% of your assets under management annually. It's 0.60% for portfolios below $250,000, 0.50% for portfolios between $250,000 to $1 million, and 0.40% for portfolios over $1 million.

What is considered a rich bank account? ›

Someone who has $1 million in liquid assets, for instance, is usually considered to be a high net worth (HNW) individual. You might need $5 million to $10 million to qualify as having a very high net worth while it may take $30 million or more to be considered ultra-high net worth.

Do billionaires use different banks? ›

Some billionaires may have accounts at multiple banks for diversification and security reasons, while others may consolidate their accounts into one or a few banks for simplicity and ease of management. It's also important to note that not all billionaires may keep their wealth in traditional banks.

Which bank is best for high net worth individuals? ›

If you have at least $1 million in Citi deposit, retirement and investment accounts, you are eligible for Citigold Private Client and get benefits including more-expansive wealth-planning and investment services, $400 annually for subscriptions and memberships, and higher limits for ATM withdrawals and purchases.

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