Private accounts taken up for package rather than rate

Premier private bank accounts do not have a very high interest rate compared to high street banks and are often taken out for the additional benefits they provide, says an expert.

Samantha Owens, head of personal finance at Moneyfacts, said customers must have high balances to receive any credit interest, which would not be particularly high compared to other accounts.

However, she noted that people open premier private bank accounts because of the benefits they offer, such as investment advice and access to bank managers.

Commenting on who might find this type of account most useful, Ms Owens said: “People who are worth a lot of money, basically… They’re not really for people to just walk in off the street.”

Yet such accounts appear to be gaining in popularity, with Schroders reporting earlier this month that its private banking pre-tax profits were up 54 per cent with a net income rise of 11 per cent.

Ms Owens said that Coutts pays 0.15 per cent on a balance of £5,000 and offers free banking for customers who have over £2,500 in their accounts.

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Bank says there is a “lack of understanding” in offshore banking

Offshore banking suffers in the UK from a “lack of understanding”, NatWest said today.

Traditionally thought of as offering tax benefits and little else, the bank says that offshore banking gives the customer a raft of advantages if they have “international requirements”, and that the service had “changed” over the past decade.

Head of international private banking for NatWest Julian Gouge said that those who retired abroad might have particular reasons to bank offshore, though he admitted that “there is a degree of complexity” to the understanding of the international taxation systems which is necessitated by the service.

“It’s [about] having an understanding of what you’re doing and when you’re going, in the same way that you would medical facilities or whatever before you go overseas” he added.

“Like all the things, the majority of people think it’s probably best to look at these things beforehand, and the tax is no different.

“I think there probably is some nervousness using them, but just because there’s a lack of understanding if anything,” Mr Gouge surmised.

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