Offshore Private Banking And What Is Available

Private banking refers to banking that is done with very rich clients with large amounts of money that they deposit in a private bank. Usually, a minimum amount needed before banks will offer offshore private banking is $100,000. But an amount as low as $10,000 (or lower) is being accepted as the minimum balance by some private banks. This is perhaps done to increase their customer base, and also their reach in the market.

As the name implies, offshore private banking is not restricted to geographical jurisdictions, and is a service offered via an offshore jurisdiction. The jurisdictions most commonly favored for such activities are the more highly protected and regulated ones, although offshore private banking is definitely not completely restricted to such jurisdictions.

People with a high net worth find such banks highly convenient. The very first private banks were held privately. They were established in Geneva in Switzerland in the 1800s. And they were created as limited partnerships. In reality, a few still exist to this day, even though these days there are many types of private bank situated across the globe.

Highly personalized offshore services, no tax deductions on the interest earned, and confidentiality are the three most important features of offshore private banking. Exclusivity that such banking provides is another feature of such banks that add to the appeal.

One of the other key features of private banking is providing a committed and custom-made level of service to a client. Such a level of service is normally not heard of nowadays due to the advent of internet banking and call centre based service centers.

However, lately offshore private banking has started taking a different meaning. It may not necessarily be laying stress on offering confidential, almost family relationship with customers. This is not to suggest that such relationships do not exist, as they still do, for example, in the traditional places. But then they apply more to the highly affluent clients than to reasonably rich people who desire highly personalized dealings compared to what they may be getting from their local personal bankers.

Before using the services of an offshore private bank one needs to ensure that they are safe enough and are also rather objective. It is wise to look for a bank which is attempting to make money out of private banking as an activity in itself instead of just using it as a marketing channel for clients for its financial products.

Despite certain limitations and restrictions, offshore private banking is highly useful. This is why private banks specializing in offering offshore private banking are still doing good business and have a large customer base across the world.