What is private Banking?
 

"Private banking," is a mechanism used by wealthy individuals to manage immense amounts of money in secret accounts. Private banks are banks within a larger bank, distinguished by the size of the accounts -- prospective private banking clients are usually required to deposit $1 million or more -- and the presence of a one-on-one private banker assigned to manage the assets of each client.

Private banking is a term for banking, investment and other financial services provided by banks to private individuals investing sizable assets. The term "private" refers to the customer service being rendered on a more personal basis than in mass-market retail banking, usually via dedicated bank advisers.

Historically private banking has been viewed as very exclusive, only catering for high net worth individuals with liquidity over $2 million, although it is now possible to open some private bank accounts with as little as $250,000 for private investors. An institution's private banking division will provide various services such as wealth management, savings, inheritance and tax planning for their clients. A high-level form of private banking (for the especially affluent) is often referred to as wealth management.

The word "private" also alludes to bank secrecy and minimizing taxes via careful allocation of assets or by hiding assets from the taxing authorities. Swiss and certain offshore banks have been criticized for such cooperation with individuals practicing tax evasion. Although tax fraud is a criminal offense in Switzerland, tax evasion is only a civil offense, not requiring banks to notify taxing authorities.

Switzerland, in particular Geneva, is a major location for private banking. Swiss banks hold an estimated 35% of the world's private and institutional offshore funds, or 4.6 trillion Swiss francs.

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