Millionaires typically use private banks, wealth management divisions of major banks, or boutique financial institutions rather than standard retail branches

The banking choice for someone with a million dollars or more depends on what they want to do with the money. A person with $1 million in liquid assets will not sit in line at a Chase branch. Instead, they work with private banking — a dedicated team at a bank who manages their accounts, investments, and financial strategy. The bank assigns them a relationship manager, offers lower fees, higher interest rates on deposits, and access to investment products not available to regular customers.

The actual bank name matters less than the account type and the minimum balance required to open it. Bank of America, Wells Fargo, JPMorgan Chase, and Citibank all have private banking arms. So do regional banks like U.S. Bank and PNC. The difference is not the bank's name on the building — it is the service tier you enter once your balance crosses a threshold, usually $250,000 to $1 million depending on the institution.

Key Takeaways

  • Private banking divisions at major banks serve high-net-worth clients and typically require a minimum balance between $250,000 and $1 million to open an account.
  • Wealth management firms, independent advisors, and boutique banks offer alternatives to traditional private banking and may have lower minimums or different fee structures.
  • The account type — not the bank's name — determines the service level, fees, and products available to you.
  • Millionaires often use multiple banks and institutions simultaneously to diversify holdings, manage tax strategy, and access specialized services.
  • FDIC insurance covers only up to $250,000 per depositor per bank, so accounts above that threshold carry uninsured risk at any single institution.

Private Banking at Major Banks and Account Minimums

JPMorgan Chase's Private Bank requires a minimum of $1 million in investable assets. Bank of America's Merrill Private Banking starts at $250,000. Wells Fargo's Private Banking threshold varies by region but typically sits between $500,000 and $1 million. Citibank's Citigold Private Client begins at $250,000. These minimums are not fixed — they change based on the bank's current strategy, your location, and the mix of assets you hold.

Once you cross the threshold, you get a dedicated relationship manager who knows your full financial picture. That manager coordinates with the bank's investment advisors, tax specialists, and lending officers. You pay lower fees on trades, receive preferential interest rates on savings accounts and certificates of deposit, and get access to structured products, private equity funds, and hedge funds that retail customers cannot buy. You also get perks like fee waivers on certain services, priority customer service, and invitations to exclusive events.

The catch is that private banking is profitable for the bank only if you keep a large balance there and use their investment services. If you deposit $1 million and never move it, the bank makes little money. If you invest that $1 million through their advisors, the bank takes a percentage of assets under management — typically 0.5% to 1% per year — and makes money on the spread between what they pay you on deposits and what they lend out.

Wealth Management Firms and Independent Advisors

Many millionaires do not use a bank's private banking division at all. Instead, they hire an independent registered investment advisor (RIA) or work with a standalone wealth management firm. These firms do not take deposits — they manage investments only. They charge a fee based on assets under management, typically 0.5% to 1.5% per year depending on the size of your portfolio and the services included.

The advantage is flexibility. An independent advisor can hold your money at any custodian — Fidelity, Schwab, Interactive Brokers, or a bank of your choice. You keep your cash at a bank that pays you the highest interest rate, your investments at a custodian with the lowest fees, and your advisor coordinates between them. You are not locked into one institution's products or forced to pay for services you do not use.

Finding an independent advisor requires more legwork than walking into a bank branch. You can search the SEC's Investment Adviser Public Disclosure database to find registered advisors in your area, check their disciplinary history, and compare fee structures. Many advisors have minimum account sizes of $500,000 to $2 million, though some smaller firms take clients with less.

Boutique Banks and Alternative Institutions

Some millionaires use boutique banks — smaller, independent institutions that cater to high-net-worth clients. Examples include Silicon Valley Bank (before its 2023 closure), Umpqua Bank's private banking division, and regional banks like Glacier Bancorp. These banks often offer more personalized service than mega-banks, lower minimums, and faster decision-making on loans and investments.

The trade-off is that a boutique bank may have less capital behind it, fewer investment products, and less geographic reach. If you need to access your money in multiple states or countries, a regional bank may not have branches or partnerships in those places. You also carry more risk if the bank fails — FDIC insurance still covers only $250,000 per depositor per bank, but a smaller institution is statistically more likely to fail than JPMorgan Chase.

Some millionaires also use online banks or fintech platforms for specific purposes. A high-yield savings account at an online bank like Marcus or Ally may pay 4% to 5% interest, far more than a traditional bank's savings account. They keep a portion of their cash there for liquidity and safety, while keeping the bulk of their wealth invested through a wealth manager or private bank.

How Millionaires Spread Money Across Multiple Banks

A person with $5 million does not keep it all at one bank. They split it across multiple institutions for three reasons: FDIC insurance, diversification, and tax strategy.

FDIC insurance covers up to $250,000 per depositor per bank. If you have $5 million in cash, you need at least 20 different banks to insure all of it — or you accept that some of your money is uninsured. Many millionaires keep only what they need for immediate expenses at FDIC-insured banks and invest the rest in stocks, bonds, and other securities that are not insured but historically grow faster than cash.

Diversification means not trusting one institution with all your money. A millionaire might keep $1 million at JPMorgan Chase for private banking services, $1 million at Fidelity for investment management, $500,000 at a regional bank for a business line of credit, and $500,000 split across three online banks for high-yield savings. If one institution has a problem — a security breach, a failed investment, a sudden policy change — the damage is limited.

Tax strategy sometimes requires holding assets in different places. A person with real estate in multiple states might use a local bank in each state to manage property taxes and local business accounts. Someone with international income might use a bank with strong international services in one location and a domestic bank elsewhere.

The Role of Investment Custodians and Brokers

For millionaires who invest heavily, the custodian matters as much as the bank. A custodian is an institution that holds your securities — stocks, bonds, mutual funds, exchange-traded funds — and keeps them safe. The major custodians are Fidelity, Charles Schwab, Interactive Brokers, and Pershing (owned by BNY Mellon).

You do not necessarily bank at your custodian. You might bank at JPMorgan Chase for private banking and hold your investments at Fidelity through a wealth manager. The wealth manager instructs Fidelity to buy and sell on your behalf, and Fidelity keeps the securities in your account. You transfer cash from your bank to Fidelity when you want to invest, and Fidelity transfers cash back to your bank when you need it.

Custodians also offer their own banking services — Fidelity and Schwab both have cash management accounts that pay competitive interest rates and offer check-writing and debit cards. Some millionaires use these as their primary bank because the custodian can coordinate investments and cash in one place.

Specialized Services: Trust Companies and Private Banks Abroad

Millionaires with complex estates often use trust companies — institutions that specialize in managing trusts, estates, and wealth transfer. A trust company can serve as trustee for a family trust, manage distributions to beneficiaries, and coordinate with tax advisors and lawyers. Examples include Wilmington Trust, Northern Trust, and U.S. Bank's trust division.

Someone with significant international assets or income may also use a private bank abroad. Swiss banks like UBS and Credit Suisse historically served this role, though their role has changed with international tax reporting requirements. A person with assets in multiple countries might use a global wealth manager like Merrill Lynch, Morgan Stanley, or Goldman Sachs, which have offices worldwide and can coordinate across borders.

These specialized services come with higher fees and stricter minimums — often $5 million to $10 million or more. But they handle complexity that a standard private bank cannot: multi-generational wealth planning, international tax compliance, and coordination across dozens of accounts and entities.

What Millionaires Actually Care About in a Bank

The specific bank name matters far less than the features. A millionaire evaluates a bank or wealth manager on: the quality of the relationship manager, the range of investment products, the fee structure, the interest rates on cash, the tax efficiency of the investments, and access to specialized services like lending and trust management.

A person with $1 million might choose a regional bank's private banking division over JPMorgan Chase if the regional bank offers a better relationship manager, lower fees, and a faster loan approval process. Someone with $10 million might split their money between a mega-bank for stability and a boutique firm for personalized service. The choice depends on what they want to do with the money, not on prestige.

The one universal rule: do not keep all your cash at one bank. Spread it across institutions to protect against FDIC limits, reduce risk, and maintain flexibility. Use a bank for banking services — deposits, loans, cash management — and a separate advisor or custodian for investments. This separation keeps fees low and gives you options if you want to change advisors or banks.

Frequently Asked Questions

Do I need $1 million to open a private banking account?

No. Minimums vary by bank and region, typically between $250,000 and $1 million. Some banks have lower minimums if you combine checking, savings, and investment accounts. Call the private banking division directly to ask about current minimums in your area.

What is the difference between private banking and wealth management?

Private banking is a service offered by a bank — you deposit money there and they manage it. Wealth management is usually independent — an advisor manages your investments but does not take deposits. Wealth managers often offer more flexibility because they can use any custodian, while private banks push you toward their own products.

Is my money safe at a private bank if it exceeds $250,000?

FDIC insurance covers only $250,000 per depositor per bank. Money above that is uninsured, though it is still held in trust and protected by the bank's capital. To insure all your cash, split it across multiple banks. Most millionaires keep only operating cash at banks and invest the rest in securities.

Can I use an online bank if I have a million dollars?

Yes, for the portion you want to keep in cash. Online banks like Marcus and Ally offer higher interest rates than traditional banks and are FDIC-insured up to $250,000. Use them for emergency funds and short-term cash, and invest the rest through a wealth manager or private bank.

How much does private banking cost?

Fees vary widely. Private banks typically charge 0.5% to 1% per year on assets under management, plus trading fees and fees for specialized services. Some waive certain fees if you maintain a large balance. Ask for a full fee schedule before opening an account — fees can add up quickly on large portfolios.