Difference Between Personal Banking and Private Banking

Banking is one of the most reliable sectors in this advancing world. Being a trustworthy industry, it provides a safe environment to store cash and credits.


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Which of the following is a type of loan provided by banks?

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Which of the following is NOT among the functions of a central bank?

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How does PayPal work?

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What is the name of the type of investment where an individual lends money to a borrower and earns interest on the loan?

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What is the name of the type of loan used for financing the purchase of a car?

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What is the name of the type of mortgage where the loan balance decreases over time as the borrower makes payments?

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What is a foreign exchange rate?

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The interest rate at which commercial banks can borrow money from the central bank is known as

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What is the primary function of a commercial bank?

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Not only this, but it also helps people to keep an account of their regular expenditures.

Since it is such an important industry, everyone should be aware of the difference between various banking systems.

Key Takeaways

  1. Personal banking refers to the banking services provided to individuals by commercial banks for their financial management.
  2. On the other hand, private banking is a specialized service that caters to high-net-worth individuals by offering personalized financial advice and management.
  3. The primary difference between personal and private banking lies in the level of service, as private banking offers exclusive services to high-net-worth clients while personal banking serves the masses.

Personal Banking vs Private Banking

The difference between Personal Banking and Private Banking is that Private Banking targets a group of people chosen by the bank. People with a huge net worth enjoy special monetary services and other value-added aids under this banking.

Personal Banking vs Private Banking

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Personal Banking, commonly known as Retail Banking, are services given by the bank to people individually. It serves the consumers instead of companies and corporations. In simple terms, the process of banking that deals with individual or specific customers are called Personal Banking/Consumer Banking.

Private Banking is offered to selected people that have a decent net worth in terms of the bank. The bank serves them customized services that add value to the customers’ assets. In short, Private Banking was the firm form of Banking, started in Venice. The initials banks were centred around maintaining the record of wealthy families.

Comparison Table

Parameters of ComparisonPersonal BankingPrivate Banking
DenotationIt denotes the banking services that are given individually to the consumers.Private Banking services are only given to people with high net worth.
Terms of Services Personal Banking provides general services to all its consumers.The private Banking sector offers various financial as well as value-added services.
GenesisThe concept of Personal Banking originated after the introduction of different banking sectors.It is the first mode of banking that originated in Venice.
SynonymsPersonal Banking is also known as Retail or Consumer Banking.The name Private Banking was itself given to keep it different from other subordinates.
Privacy and SecrecyAlthough it ensures the privacy of customers, one can not hide their account records from the official department.It ensures the total security and secrecy of its customers. The Swiss Bank is a great example of a financial company that supports tax evasion.

What is Personal Banking?

Personal Banking is the most common form of Banking and is also known as Retail or Consumer Banking. Retail Banking works towards meeting the needs of customers individually.

To manage the assets of the consumers, to deposit and credit their money with an account of their records, is what Personal Banking means.

Personal Banking includes a spectrum of services like debit cards, personal loans, savings account, current account, fixed deposits, and many more.

With time Consumer Banking is growing through the online mode. The financial banking firms are switching to the online mode, keeping in mind the safety and privacy of their customer services.

There are several types of Retail Banks in the market currently. They work on the concept of giving and take.

When a Consumer opens a savings account, the bank lends their money to other clients, keeping a certain amount of money in the federal reserves.

The formula of Personal Banking generates big revenue every year for the banks. To keep their customer service in check, Retail banks are coming up with innovative ideas everyday.

personal banking

What is Private Banking?

As the name sounds, Private Banking serves certain people with a high net worth in the market.

Apart from customized services, these high net worthy people are also given value-added services with a bank advisor of their own.

It comprises value-added services like discretionary asset management, brokerage, tax advisory, etc.It has quite a history, as it was the first mode of Banking that originated in Venice.

The first few banks in Venice were targeted at providing services to the wealthier population. Coming from a traditional background, Private Banking was given its name to keep a difference from Retail Banking.

Some of the Royal families, like the Dutch Royal Family and the Princely Family of Liechtenstein, were amongst the first ones to enjoy private banking services.

Not only this, but Private Banking also helps high net worth individuals to maintain the secrecy of their assets from the income tax department.

One of the most prominent examples is the Swiss Bank. Since Tax evasion is not a crime in Switzerland, people tend to store their money to keep themselves free from paying taxes.

The United States of America is considered to be the biggest market in the Private Banking sector. It consists of more than 29% of the total high net worth individuals of the world.

private banking

Main Differences Between Personal Banking and Private Banking

  1. Personal Banking is meant to serve the needs of customers with general services, whereas Private Banking maintains secrecy and provides customized services to high net worth people.
  2. Private Banking also offers value-added services to its customer. On the other hand, this is not the case with Personal Banking.
  3. The Fiscal Banking companies also provide high net worth individuals with a bank advisor, but Retail Banking customers are not given these facilities.
  4. While the Personal Banking system stays open to the tax departments, Private Banking maintains the secrecy of its customer up to a great extent.
  5. Private Banking was the first Banking system that started from the banks in Venice, whereas Personal banking came into action much later.
Difference Between Personal Banking and Private Banking
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