Best Ways to Grow Your Wealth Through Priority Banking

From welcome rewards to preferential rates and premium life insurance policies, wealthy individuals can leverage on their priority banking relationships to help grow their wealth. 

Best priority banking accounts on SingSaver

• Citigold
• HSBC Everyday Global Account (Premier)
• Standard Chartered Wealth$aver Account

The overarching aim of priority banking is to grow your wealth with professional help and advice. But it’s not just about simply following the customised insights fed to you by your advisory team, or faithfully attending every market outlook webinar to keep ahead of market trends. 

There are a whole slew of products and features that customers of priority banking can make use of to grow their wealth, whether by directly increasing their account balances, or potentially amplifying returns.

Here are four ways wealthy individuals can increase their net worth through a priority banking relationship.

What is an Accredited Investor?
An Accredited Investor is someone who meets the requirements set out by the Monetary Authority of Singapore (MAS) and has opted in to be treated as an Accredited Investor by the bank. Accredited Investors generally have access to a wider range of investment products than non-Accredited Investors, and at the same time require less regulatory protection.

How to be an Accredited Investor?
Start your wealth journey with Citigold and speak to your relationship manager.

Advantages of an Accredited Investor

• Expand investment opportunities
  • Enjoy access to a wider range of financial products and services, including more sophisticated products to meet your bespoke wealth needs.
• Access to a team of dedicated wealth experts
  • You can count on a dedicated Senior Relationship Manager and a team of experts to help you grow your portfolio and partner you to achieve your wealth goals.

Eligibility for Accredited Investor

• Net personal assets exceeding S$2 million in value (or its equivalent in a foreign currency); or
• Financial assets (net of any related liabilities) exceeding S$1 million in value (or its equivalent in a foreign currency); or
• An income in the preceding 12 months of not less than S$300,000 (or its equivalent in a foreign currency)

Welcome rewards

Growing your wealth through priority banking can start from the very moment you sign up.

Some priority banking programmes come with attractive welcome rewards that can go up to tens of thousands of dollars. You’ll first need to fulfil the qualifying criteria (some programmes have an entire laundry list!), but once you do, that’s essentially free money in the bank.

It is not always advisable to gun for the highest level of welcome rewards, due to the opportunity costs involved (i.e., your funds may be better spent elsewhere). But if you’re sure the priority banking platform you’re joining will be of use to you, then hey, go ahead and enjoy the bump to your net worth.

Preferential rates, variable lock-in durations

As a priority banking customer, you will also be entitled to preferential rates, allowing you to earn higher interest on your assets. Additionally, you can also choose from a wider variety of lock-in durations for fixed deposits, ranging from as short as a few days to as long as several months.

Both these benefits can increase your wealth in tangible ways. Firstly, with higher interest rates, your deposits grow at a faster rate. Then, with the ability to choose shorter lock-in periods, you are better able to capitalise on market opportunities in a timely manner, instead of having to pass them up due to your funds still being locked up. 

The kicker is, when you move your funds from your fixed deposits to your investments, you now have a higher amount to put into the market – thanks to the higher interest rates – than if you had left your funds in a regular retail account.

Note, though, that the highest interest rates may only be offered on foreign currency deposits, which means you may have to take on some exchange rate risk. 

But you can choose to make your investments without first converting back to SGD, especially if you hold popular currencies like USD.

With interest rates rising, now is a good time to park your money in a high-interest savings account and let it grow! The Standard Chartered Bonus$aver offers up to 7.88% p.a. provided that you meet the spending requirements, credit your salary, pay your bills, and more.

Sign up for an account now to enjoy an exclusive welcome gift from SingSaver! 

Investment financing

Another way that priority banking can help you grow your wealth is through investment financing. 

Essentially, you can borrow funds for investment purposes, using the assets in your priority banking account as collateral. This allows you to capitalise on investment opportunities without the need to hold cash, or amplify your returns by investing a higher capital.

Now, if this sounds like investing using leverage, well, that’s because it is. And yes, using leverage is a risk, as should your investment go awry, your corresponding losses will also be magnified. Importantly, using leverage can cause you to lose more than your capital, which can seriously set you back on your wealth goals.

There are other considerations as well, such as:

• The interest charged on the loan. High interest can lower or even wipe out your returns.
• The loan-to-value ratio on your collateral. You can only borrow up to a certain percentage of the value of your collateral.
• Your ability to maintain the collateral value. If the collateral value falls short while your loan is outstanding, you may have to top-up your collateral, or be forced to sell off part of your investment – potentially at a loss. 

There are several ways such financing may be structured, which may come with other features that warrant different considerations.

With judicious use, investment financing can accelerate the growth of your net worth. But it is imperative to understand that investment financing only helps you grow your wealth if your investments produce a positive return. 

Life insurance

Priority banking customers may also be offered life insurance policies as another tool to grow their wealth.

Here’s how it works. Let’s assume you have S$1 million put aside, to be left to your descendants upon your passing. The total value of your estate would be S$1 million. 

However, you use the S$1 million to purchase a life insurance policy with a sum assured of S$2.5 million. Now, upon your death, the policy will pay out S$2.5 million. This means that the total value of your estate is now S$2.5 million – S$1.5 million more than if you had simply held on to your money. 

Now, life insurance isn’t restricted to the wealthy, and anyone can grow their wealth by purchasing a suitable life insurance policy. 

The difference is priority banking customers may be able to access specific insurance policies with better premium-to-payout ratios, which are not offered to the general public.