While movies often portray the ultra-rich as having secret millionaire bank accounts at Swiss banks to hide their money away from the IRS, the reality is quite different.
Moving large amounts of money is not as easy as it used to be. Today, many governments and financial institutions worldwide are committed to fighting corruption and money laundering, which means adequate reporting between countries is very much in place.
While secret banks might have been used in the past, this is hardly, if ever the case.
Private Banking for Millionaires
When it comes to banking, there are two options – personal and private banking.
- Personal banking is the banking we all know, where banks offer products and services to the general public.
- Private banking, which the same banks typically offer, is reserved for high-net-worth individuals (HNWIs).
Private banking includes customized, individually-tailored services as well as investment opportunities. It’s the more exclusive form of banking.
Most U.S. banks have a private banking arm, which allows them to attract the especially affluent.
Why Do Millionaires Use Private Banks?
Millionaires tend to turn to private banks for a variety of reasons.
Since they offer a wide range of financial products, services, and expertise under one roof, the element of convenience can be very enticing. There are also several perks and more favorable options and rates, making the bank very attractive.
At private banks, you can expect to find the same banking services that you see at personal banks, including credit cards, savings accounts, checking accounts, etc. But you’ll also find several services regular banks don’t offer.
Services Offered by Private Banks:
- Higher Rates on Savings Accounts. Like tiered rates at personal banks, private banks automatically offer an institution’s highest rates.
- Dedicated Customer Service. High net-worth customers are high-priority clients, and they’re treated as such. You’ll have access to more advisory services and portfolio management options than in your typical branch.
- Higher Payment Limit. Millionaire bank account customers often need to move larger sums than typical customers. The standard limits on debit card purchases, ATM withdrawals, and ACH transfers are all significantly higher at a private bank.
- Better Borrowing Terms. Interest rates on loans are typically lower because wealthy customers are generally at lower risk.
- Cash Management Accounts. The most compelling feature of cash management accounts is that they use bank partnerships to spread funds to multiple accounts, protecting more than the standard $250,000 FDIC insurance.
- Fee Waivers. HNW customers automatically enjoy maintenance fee waivers, free wire transfers, cashier’s checks, safety deposit boxes, and more.
- Real Estate Management. Private banks often offer services to help clients manage their real estate portfolios. This includes services and advice around acquisition and management strategies like maximizing cash flow or selling tasks like identifying qualified buyers or minimizing capital gains.
Best Private Banks For Millionaires
So, what banks do millionaires use to manage their personal finances and business finances? Let’s take a look at some of the private banks that millionaires use all across the country.
Some of these banks also have offices and branches abroad, making them an ideal option for those whose businesses have ties and operations outside of the US.
- Bank of America: Private Banking
- Citi: Private Banking
- HSBC: Private Banking
- JP Morgan: Private Bank
- Morgan Stanley
- UBS
- Wells Fargo: Private Bank
1. Bank of America: Private Bank 
Bank of America Private Bank is the private banking arm of Bank of America. You need to have at least $3 million in liquid assets to join.
They offer several services usually not found at private banks, like investment management, wealth planning, specialty asset management, and art services.
There’s even a ‘Strategic Philanthropy & Grantmaking’ service. This service is for the wealthy and ultra-rich looking for help in creating a giving strategy that allows them to maximize their impact in the world.
An advisor helps them define their values and create a philanthropic strategy for the causes they support and align their contributions with their financial goals.
Learn More:
2. Citibank: Private Bank
Citi Private Bank is the private banking department of Citibank. Their services are reserved for worldly and wealthy individuals as well as their families.
While eligible clients can get deposit accounts and retirement accounts as you’d find at any other bank, there are also many specialized products and services. These include things like aircraft financing, investing, escrow and agency services, and several others.
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3. HSBC: Private Banking
HSBC Private Banking brings together the bank’s banking, investments, and wealth management expertise to offer wealthy individuals a complete financial management solution.
They focus on business owners and their families and, of course, are available worldwide.
Accounts come with many perks, including complimentary services, discounts, and personalized support tailored to the account holder’s individual needs.
Learn More:
4. JP Morgan: Private Bank
J.P. Morgan Private Bank offers different services for different types of individuals with varying financial needs. Among their offerings, you’ll find planning and advice, investing, lending, trusts, and estates, as well as banking.
Banking is available for both individuals and businesses. Some of the perks on offer include no fees (even overdrafts and out-of-network ATM withdrawals get refunded), dedicated teams, and discounts on loan rates.
5. Morgan Stanley
Unlike many other banks in this list, Morgan Stanley is an investment bank owned by the Mitsubishi UFJ Financial Group (also known as MUFG).
Their private wealth management division offers customized services and solutions to those the bank describes as individuals and families of significant means.
Customers can expect a range of services that include investment strategizing, wealth transfer, risk management, and lifestyle enhancement, among others.
6. UBS
UBS Wealth Management services ultra-high net worth individuals and their families through its global presence, which is available worldwide. They offer bespoke solutions to their customers while prioritizing their businesses, investments, family, and purpose.
The bank also provides exclusive networks that allow its customers to get in touch with other people who share their same interests and passions – all of whom are wealthy.
7. Wells Fargo: The Private Bank
Wells Fargo’s The Private Bank is aimed at wealthy individuals who need financial solutions tailored to their requirements.
The bank offers a team-based approach, meaning a whole team will be dedicated to the client’s account. Having this team work together allows clients to leverage diverse expertise when managing their wealth.
Clients also get access to exclusive experiences and events and insights into the market to understand what to expect as the world continues to evolve.
Learn More:
How is Banking Different for the Ultra-Rich?
Most high-net-worth individuals bank just like regular people, with a few exceptions. As a bank’s private client, they get access to many services that ordinary people do not.
The main difference here is that they might be eligible for better interest rates. Still, most banks offer this to those with a higher account balance anyway.
The important thing to understand here is context. While a million dollars might sound like a lot of money, it might not guarantee you access to all of the exclusive banks.
In most cases, you need more than one million to afford access to banks like Morgan Stanley, which are reserved for those who are very wealthy. The 1% of the 1%, if you will.
Here are some other factors that high net-worth individuals might consider.
Jurisdictions
A jurisdiction is an area, more often than not a country, with its own legal framework. The United States is its own jurisdiction (federal and state), and so are other countries with jurisdiction. By owning its own legal framework, a country can make its own laws, including tax laws.
Taxes are a big thing whether you have little money or a lot of money. Neither the poor nor the rich like to pay taxes with some exceptions, of course. This is why jurisdictions pay a lot of attention to their tax laws.
While some countries have taken the route to increase their taxes, others have done the opposite – they lowered them. By reducing taxes, they can attract investors who are invariably rich and their money. This gives them access to capital that would have previously been unavailable.
One of the options available to rich people is to move their money to a bank account in a jurisdiction that offers them lower tax rates. Since taxes should be paid in the U.S. anyway, they can set up a shell company in that jurisdiction and then funnel money through it.
In fact, even companies take this route. Apple and Microsoft, for example, have major operations in Ireland. This country offers much lower tax rates, but still has the necessary infrastructure to allow large companies to operate. It’s important to note that this is very different from offshore accounts, which we will be discussing next.
Onshore vs. Offshore Accounts
An offshore account is simply a bank account held at a bank located outside of the U.S. It is perfectly legal to keep an offshore account – as long as all due taxes are paid. While many associate offshore accounts with tax avoidance, this is not always the case. In fact, it rarely ever is.
As we discussed in the introduction of this article, most countries share information with each other, including financial information. This makes it very difficult for anyone to hide money in a secret bank account offshore. Of course, some secretive jurisdictions do not share information with the U.S. or others, but these are actually few and far between.
Instead, what is more likely the driving force behind holding an offshore account is, risk-management.
For U.S. millionaires or billionaires, the FDIC only insures an account up to $250,000. There are cash management accounts that can help protect more, but this still isn’t a perfect solution.
What’s more, the FDIC only insures the money in the account, and not its value against other currencies. The value of the US dollar fluctuates just like every other currency or investment. Sometimes it goes up, and sometimes it goes down. If you don’t have a lot of money, the difference will only be a few cents. But if you have millions, the difference will amount to thousands.
To protect themselves from adverse market conditions, the rich diversify their portfolio by moving some of their money offshore.
Asset Diversification
Money in a bank account is a type of liquid asset called cash. While cash is good to have, it does not grow as much as other types of investments.
A high-yield checking account will give you APY rates of up to 1%, while CD rates might go up to around 1.50%. While this might sound great, especially since the risk is relatively low, millionaires will typically want a higher return on their money, even if this comes at a greater risk.
As such, millionaires will often hold different bank accounts that do not contain cash. Instead, it will have other types of assets, such as mutual funds, which are riskier but offer the possibility of bigger rewards.
Even so, a percentage of their wealth is kept in bank accounts, right here at home. They use the same banks most Americans use but tend to turn to the bank’s private banking arm instead of the personal one we all use.
FAQs
As such, millionaires will often hold different bank accounts that do not contain cash. Instead, it will have other types of assets, such as mutual funds, which are riskier but offer the possibility of bigger rewards.
Do millionaires use different banks? ›
As such, millionaires will often hold different bank accounts that do not contain cash. Instead, it will have other types of assets, such as mutual funds, which are riskier but offer the possibility of bigger rewards.
What banks do multi millionaires use? ›
These 10 checking accounts are designed with the wealthy in mind and are intended for banking clients who desire convenient access to cash with premium benefits.
- Bank of America Private Bank. ...
- Citigold Private Client. ...
- Union Bank Private Advantage Checking Account. ...
- HSBC Premier Checking. ...
- Morgan Stanley CashPlus.
Wealthy people use many accounts to build wealth, and three are widely available. They use retirement accounts like IRAs and 401(k)s for tax benefits and free money. And they love to buy low-cost index funds in brokerage accounts to build accessible wealth.
Do rich people use regular banks? ›
Many high-net-worth individuals choose to put their money in checking accounts offered by major banks. But instead of opting for the standard checking account, these millionaires have access to private banking opportunities tailored to their money management needs.
Where do millionaires keep their money bank? ›
Examples of cash equivalents are money market mutual funds, certificates of deposit, commercial paper and Treasury bills. Some millionaires keep their cash in Treasury bills that they keep rolling over and reinvesting. They liquidate them when they need the cash.
Do millionaires keep their money in checking account? ›
High net worth investors typically keep millions of dollars or even tens of millions in cash in their bank accounts to cover bills and unexpected expenses. Their balances are often way above the $250,000 FDIC insured limit.
What is the best bank account for millionaires? ›
New York – For the fifth consecutive year, Citibank has been named "Best Bank for High-Net-Worth Families" by Kiplinger's Personal Finance, rising to the top of the ranking for the Citigold offering available to high-net-worth clients.
Do millionaires put their money in one bank? ›
Some millionaires bank their money in offshore accounts, while others keep it in more traditional bank accounts. Many high-net-worth individuals bank with large banks that have a presence in multiple countries, such as JPMorgan Chase & Co.
What bank does Warren Buffett use? ›
(AP) — Investor Warren Buffett recommitted to his favorite bank stock, Bank of America, during the first quarter while dumping two other banks as part of a number of moves in Berkshire Hathaway's stock portfolio.
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.
How many bank accounts do millionaires usually have? ›
An average millionaire has at least five rich bank accounts. Each of them is usually designed for a specific purpose: savings. investments.
What are the 7 streams of income? ›
The 7 Streams of Income to Get Rich
- Earned Income. Earned income is the most common and traditional form of income that most people receive through their employment. ...
- Capital Gains. ...
- Interest Income. ...
- Dividend Income. ...
- Rental Income. ...
- Business Income. ...
- Royalty Income.
No matter how much their annual salary may be, most millionaires put their money where it will grow, usually in stocks, bonds, and other types of stable investments. Millionaires put their money into places where it will grow such as mutual funds, stocks and retirement accounts.
Can you have millions in a bank account? ›
Generally, there's no checking account maximum amount you can have. There is, however, a limit on how much of your checking account balance is covered by the FDIC (typically $250,000 per depositor, per account ownership type, per financial institution), though some banks have programs with higher limits.
What bank do people use the most? ›
1. JPMorgan Chase. Chase Bank is the consumer banking division of JPMorgan Chase. It currently has more than 4,700 branches and more than 16,000 ATMs.
Do billionaires use credit cards? ›
Wealthy Americans generally use credit cards the same way that everyone else does. They opt for cash back and no annual fee cards, and generally trust the big issuers.
How do billionaires access cash? ›
Billionaires generally derive most of their income from asset appreciation, rather than salaries or bonuses. Unlike ordinary income, asset appreciation is not taxed until a gain is realized through the sale of the asset.
What happens to my money in the bank if the dollar collapses? ›
The agency collects insurance premiums from banks so that in the event that bank becomes insolvent deposits at the financial institution are guaranteed up to a limit, at no expense to the US taxpayer. The standard deposit insurance coverage limit is $250,000 per depositor, per ownership category, per FDIC bank.
Is it bad to keep all your money in a checking account? ›
Not necessarily. Money in a checking account is easy to access, and keeping balances above the bare minimum can help you avoid monthly maintenance fees. But having a bloated checking account means you're missing out on higher returns in a savings or retirement account.
Where to safely keep cash at home. Just like any other piece of paper, cash can get lost, wet or burned. Consider buying a fireproof and waterproof safe for your home. It's also useful for storing other valuables in your home such as jewelry and important personal documents.
Should I be pulling my money out of the bank? ›
Despite the recent uncertainty, experts don't recommend withdrawing cash from your account. Keeping your money in financial institutions rather than in your home is safer, especially when the amount is insured. “It's not a time to pull your money out of the bank,” Silver said.
Do rich people use credit unions? ›
While credit unions are often associated with small businesses and local families, higher net worth individuals and growth companies actually have a long history with these financial institutions. In fact, many have their own brand of private banking or wealth management for individuals and larger companies.
What bank is best for lottery winnings? ›
Some examples of private banks that are well-suited to take your lottery winnings include Citigold Private Client, HSBC Premier, Chase Private Client, and Union Bank Private Client.
Which bank has the best wealth management? ›
How much money should you keep in one bank? ›
Most financial experts end up suggesting you need a cash stash equal to six months of expenses: If you need $5,000 to survive every month, save $30,000.
How much money can you safely have in one bank? ›
COVERAGE LIMITS
The standard insurance amount is $250,000 per depositor, per insured bank, for each account ownership category. The FDIC provides separate coverage for deposits held in different account ownership categories.
How much money can you safely put in one bank? ›
An account that contains more than $250,000 at one bank, or multiple accounts with the same owner or owners, is insured only up to $250,000. The protection does not come from taxes or congressional funding. Instead, banks pay into the insurance system, and the insurance provides their customers with protection.
What bank did Buffett invest in that is seen as being genius? ›
Warren Buffett is one of the most famous and richest investors of all time. He has amassed a fortune of over $80 billion and has held the position of the third richest person on the planet. In 1964, Buffett invested in the financial services company American Express.
What banks did Buffett sell? ›
The billionaire's investment conglomerate Berkshire Hathaway (BRK-A) (BRK-B) sold $1.4 billion of its remaining holdings in custody bank Bank of New York Mellon (BK) and Minneapolis regional lender US Bancorp (USB), according to filings.
In fact, billionaire investor Warren Buffett has called a 30-year mortgage "the best instrument in the world." He personally took out a 30-year mortgage when he purchased his home although he could've easily avoided doing so, and advises most home buyers to do the same. Here's why he's right.
How much money are you considered wealthy? ›
The Modern Wealth Survey collected responses from 1,000 adults between the ages of 21 and 75. According to those surveyed, it would take an average net worth of approximately $2.2 million to be considered “wealthy” in 2022. In 2021, survey respondents indicated it would take a net worth of $1.9 million.
What percentage of Americans have a net worth of over $1000000? ›
There are 5.3 million millionaires and 770 billionaires living in the United States. Millionaires make up about 2% of the U.S. adult population. While an ultra-high net worth will be out of reach for most, you can amass $1 million by managing money well and investing regularly.
What income is upper middle class? ›
Many have graduate degrees with educational attainment serving as the main distinguishing feature of this class. Household incomes commonly exceed $100,000, with some smaller one-income earners household having incomes in the high 5-figure range.
What percentage of Americans have $100000 in their bank account? ›
Most Americans are not saving enough for retirement. According to the survey, only 14% of Americans have $100,000 or more saved in their retirement accounts. In fact, about 78% of Americans have $50,000 or less saved for retirement.
What amount does the average person have in their bank account? ›
In terms of median values, the 2019 figure of $5,300 is 10.65% higher than the 2016 median balance of $4,790. Transaction accounts provide account owners with immediate access to cash. They include savings, checking, money market, prepaid debit cards and call accounts.
What percent of people have a million dollars in the bank? ›
In fact, statistically, around 10% of retirees have $1 million or more in savings.
What is the average salary of a millionaire? ›
How much does a Millionaire make? As of May 24, 2023, the average annual pay for the Millionaire jobs category in the United States is $47,712 a year.
What is the most common source of income for millionaires? ›
Business Income
Many of America's millionaires earned their net worth through income from businesses that they built, and they typically work long hours, live frugally and prioritize saving money over long periods.
What are the big four habits of millionaires? ›
The top habits of millionaires are frugality, excellent time management, stock investments, and a tendency to shun high-status vehicles. You can also become a millionaire if you are willing to control your spending and focus on building your wealth. Read more to discover the habits of millionaires that made them rich.
Millionaires tend to turn to private banks for a variety of reasons. Since they offer a wide range of financial products, services, and expertise under one roof, the element of convenience can be very enticing. There are also several perks and more favorable options and rates, making the bank very attractive.
Do millionaires keep their money in cash? ›
Many millionaires keep a lot of their money in cash or highly liquid cash equivalents. And they tend to establish an emergency account even before making investments. Millionaires also bank differently than the rest of us.
How much liquid cash do millionaires have? ›
Studies indicate that millionaires may have, on average, as much as 25% of their money in cash. This is to offset any market downturns and to have cash available as insurance for their portfolios. Cash equivalents are financial instruments that are almost as liquid as cash and are popular investments for millionaires.
Can you deposit $100 million in a bank? ›
DDA/MMDA allows you to place funds into demand deposit and/or money market deposit accounts. You can deposit up to $135 million for each account type. With this option, you can enjoy expanded insurance protection and still have the flexibility to access your funds when you need them.
Is it safe to have more than $250000 in a bank account? ›
Some examples of FDIC ownership categories, include single accounts, certain retirement accounts, employee benefit plan accounts, joint accounts, trust accounts, business accounts as well as government accounts. Q: Can I have more than $250,000 of deposit insurance coverage at one FDIC-insured bank? A: Yes.
How much cash can you deposit in the bank without being questioned? ›
Depositing a big amount of cash that is $10,000 or more means your bank or credit union will report it to the federal government. The $10,000 threshold was created as part of the Bank Secrecy Act, passed by Congress in 1970, and adjusted with the Patriot Act in 2002.
Which bank is safest in USA? ›
Asset-heavy, diversified and regulated banks like JPMorgan Chase, Wells Fargo, PNC Bank and U.S. Bank are among the safest banks in the U.S. and should be considered if you are weighing your options.
What is the most trusted bank in America? ›
The Lifestory Research 2022 America's Most Trusted® Bank Study found Chase the most trusted bank. The America's Most Trusted® Study is a large-scale survey of consumers in the United States that seeks to identify the brands that people trust the most within their respective industries.
What is the strongest bank in America? ›
List of largest banks in the United States
| Rank | Bank name | Headquarters location |
|---|
| 1 | JPMorgan Chase | New York City |
| 2 | Bank of America | Charlotte |
| 3 | Citigroup | New York City |
| 4 | Wells Fargo | San Francisco |
80 more rowsOne of the reasons wealthy people have multiple accounts in the best banks for millionaires is to protect their money from theft. Each rich person bank account can become a target for scammers and hackers. To reduce the risk of losing vast amounts of money to theft, it is best to open multiple bank accounts.
However, statistical reports show that, on average, Americans hold 5.3 bank accounts. Based on this data, it is safe to assume that millionaires have at least five bank accounts.
How much cash in the bank is considered rich? ›
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.
Can you have too much money in one bank account? ›
Keeping all of your money at one bank can be convenient and is generally safe. However, if your account balances exceed the deposit limit that's insured by the FDIC, some of your money may not be protected if the bank fails. And if you're a fraud victim, having cash all in one place could compromise more of your money.
What percentage of Americans have more than $1000 in the bank? ›
The numbers are consistently around 60%, meaning only 40% of Americans have enough savings to cover an unexpected expense without going into debt. As of January 2023, the report shows that 57% of Americans have less than $1,000 in savings.
