When discussing the key differences between a private bank account and other types of accounts, it is important to note the additional requirements and general process of opening an account with a private bank. The main requirement for opening a private bank account is a significant amount of money – while the lowest minimum deposit is around $250,000, some banks require $5,000,000 in deposits before you can open a private bank account.

Opening a private bank account requires a certain amount of paperwork and a process to go through. While the main requirement for opening a private bank account is depositing a certain amount of cash, there are cases where applicants are denied opening a private bank account for other reasons. Each year, around 5% of applications are denied due to suspected fraud or illegal activity. To avoid accepting funds from arms or drug dealing or other illegal activities, private banks undergo rigorous risk and compliance procedures mandated by regulators to verify the identity of the prospective customer and the source of the funds. The recipient of the funds must also be identified.

Documents required for opening a private bank account
Requirements for opening a private bank account can vary slightly from bank to bank, especially in terms of the size of the required deposit. However, there are several documents that you will very likely be asked to provide by any private bank. Due to strict regulations and international agreements, banks are required to perform thorough KYC (“know your client”) and other compliance procedures, not only before accepting the potential client but throughout their relationship with him or her.

The first document you will need to provide is your passport — this is the main proof of your identity. In addition, since private bank accounts are only available to those aged at least 18, your passport will also confirm your age.

Furthermore, you will need to prepare a document verifying your official address. Often, the proof of residence must be less than three months old.

You will very probably be asked for documents that demonstrate the legitimacy of the source of your funds (such as financial statements, inheritance documents or documents proving a sale of a business or real estate) in addition to documents proving your economic background. So that the bank can be as certain as possible about the legitimacy of the funds to be deposited in the account, they may ask for identification documents for any beneficiaries of the account as well.

Interestingly, the final decision on whether or not to approve an application to open a private bank account is not in the hands of a private banker — committee meetings are held specifically for this purpose and the personal manager is the person who represents the potential client. The main reason for this is to ensure that the decision makers have no relationship with the client, and therefore have no potential personal interest in accepting a questionable application.