Decoding banking choices: Personal banking vs. private banking
3 Minutes
November 8, 2023
In the world of banking, personal banking and private banking are two terms that are oftenused interchangeably. However, they are not the same and cater to a distinct clientele andoffer different services and advantages. It’s essential to decode these two bankingchoices so that you pick the one best suited for you.
What is personal banking?
Personal banking is meant for day-to-day financial andbanking transactions for individuals from all walks of life. It includes everything fromsavings accounts and current accounts to credit cards and loan options like personal loansand home loans. All these essential banking and financial services are available to a broadaudience, which makes managing their money easy and convenient.
Whether it is a college student, a homemaker, a salaried professional, or an entrepreneur,personal banking exists to offer them a wide range of banking services to help navigate therealm of personal finance.
What is private banking?
Private banking is an upgrade from personal banking – it is an exclusive financial realmdesigned specifically for High-Net-Worth Individuals (HNIs). Typically, private banking isaccessible only to those with a net worth above a certain amount and through an invitationonly. Private banking offers a premium and sophisticated approach to banking and finance.
Another thing that sets private banking apart from personal banking is the level ofpersonalisation and customisation it offers. HNIs are offered highly tailored bankingservices and financial solutions to meet their unique needs. Moreover, private banking goesbeyond traditional banking offerings. The range of services offered by private bankinginclude investment management solutions, financial advisoryservices, estate planning, insurance planning, tax advisory services, and more.
Personal banking vs private banking
Let’s break down some of the important differences between personal banking and privatebanking in greater detail.
Client base and access
Personal banking is more inclusive because it aims to provide banking services to a widerange of individuals, irrespective of their income levels and financial backgrounds.It’s easily accessible to the general public and any person can open a bank account aslong as match the basic criteria of age and nationality.
Private banking, on the other hand, is reserved only for individuals with substantial assetsand wealth. There is a specific eligibility criterion for private banking and typicallyaccess is granted through an invitation only.
Services and solutions
Personal banking provides basic banking services like savings accounts, credit cards, andloans. The idea here is to provide easy access to standard banking and financial solutionsso that individuals can meet their financial goals irrespective of the life stage they arein. The solutions offered are not very customised and are designed keeping a broad range ofcustomers in mind.
With private banking, however, everything is tailored to the HNI client. There is adedicated relationship manager who works closely with the HNI to understand their financialneeds and to collaboratively undertake financial and investment planning. Private bankingalso offers exclusive perks like preferential interest rates on loans, luxury conciergeservices, family office solutions, and more.
Which banking service should you pick?
As an HNI, private banking is the ideal banking service for you. It not only provides basicbanking services but offers expert guidance and support in various financial and relatedaspects of your life and business, allowing you to optimise your time and wealth.
This Article is for information purpose only. The viewsexpressed in this Article do not necessarily constitute the views of Kotak Mahindra BankLtd. (“Bank”) or its employees. The Bank makes no warranty of any kind with respect tothe completeness or accuracy of the material and articles contained in this Article. Theinformation contained in this Article is sourced from empanelled external experts forthe benefit of the customers and it does not constitute legal advice from the Bank. TheBank, its directors, employees and the contributors shall not be responsible or liablefor any damage or loss resulting from or arising due to reliance on or use of anyinformation contained herein.
