Decoding banking choices: Personal banking vs. private banking
Decoding banking choices: Personal banking vs. private banking

Decoding banking choices: Personal banking vs. private banking

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 often used interchangeably. However, they are not the same and cater to a distinct clientele and offer different services and advantages. It’s essential to decode these two banking choices so that you pick the one best suited for you.

What is personal banking?

Personal banking is meant for day-to-day financial and banking transactions for individuals from all walks of life. It includes everything from savings accounts and current accounts to credit cards and loan options like personal loans and home loans. All these essential banking and financial services are available to a broad audience, 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 the realm of personal finance.

What is private banking?

Private banking is an upgrade from personal banking – it is an exclusive financial realm designed specifically for High-Net-Worth Individuals (HNIs). Typically, private banking is accessible only to those with a net worth above a certain amount and through an invitation only. 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 of personalisation and customisation it offers. HNIs are offered highly tailored banking services and financial solutions to meet their unique needs. Moreover, private banking goes beyond traditional banking offerings. The range of services offered by private banking include investment management solutions, financial advisory services, 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 private banking in greater detail.

Client base and access
Personal banking is more inclusive because it aims to provide banking services to a wide range 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 as long as match the basic criteria of age and nationality.

Private banking, on the other hand, is reserved only for individuals with substantial assets and wealth. There is a specific eligibility criterion for private banking and typically access is granted through an invitation only.

Services and solutions
Personal banking provides basic banking services like savings accounts, credit cards, and loans. The idea here is to provide easy access to standard banking and financial solutions so that individuals can meet their financial goals irrespective of the life stage they are in. The solutions offered are not very customised and are designed keeping a broad range of customers in mind.

With private banking, however, everything is tailored to the HNI client. There is a dedicated relationship manager who works closely with the HNI to understand their financial needs and to collaboratively undertake financial and investment planning. Private banking also offers exclusive perks like preferential interest rates on loans, luxury concierge services, 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 basic banking services but offers expert guidance and support in various financial and related aspects of your life and business, allowing you to optimise your time and wealth.

This Article is for information purpose only. The views expressed in this Article do not necessarily constitute the views of Kotak Mahindra Bank Ltd. (“Bank”) or its employees. The Bank makes no warranty of any kind with respect to the completeness or accuracy of the material and articles contained in this Article. The information contained in this Article is sourced from empanelled external experts for the benefit of the customers and it does not constitute legal advice from the Bank. The Bank, its directors, employees and the contributors shall not be responsible or liable for any damage or loss resulting from or arising due to reliance on or use of any information contained herein.

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