Swiss banks are known worldwide. Alongside their delicious food, beautiful places, and quality watches, the Swiss are also known for their banking system. While that fame mostly comes from investment banking and accounts holding millions, if living in Switzerland has sparked an interest in you, or you want to open a Swiss bank account, then you would like to know how their banks work.
Why Are Swiss Banks Famous?
Swiss banks have a reputation for providing anonymity, safety, and have earned the tax haven name. However, the days when Switzerland banks served for providing top-secret accounts are gone. It’s not that all banks in Switzerland swore off of offshore clients. Nevertheless, now they’re more cautious and much more regulated when it comes to non-Swiss residents who want to open Swiss bank accounts.
Switzerland now has a law—which was first an agreement between Switzerland and the U.S.—that makes tax evasion highly improbable. This law is called the Foreign Account Tax Compliance Act (FATCA), which requires the country to provide information about U.S. accounts in Switzerland.
Swiss bank account advantages
Swiss banks offer economic security, confidentiality, and asset protection. Apart from being the most capitalized and safest, swiss banks offer accounts in all major currencies, and they include low levels of financial risk. The Swiss economy is known for its stability and neutrality when it comes to conflicts.
These benefits make swiss banks the most economically stable and secure place where you can store your money. Given that, Swiss bank account opening may seem a bit tricky at first, but once you get the gist of the essential requirements, it will ease up.
How to Open a Swiss Bank Account for Non-Resident
If you’re moving to Switzerland or just someone interested in owning a bank account in Switzerland, you probably want to tackle the account opening issue head-on. Wherever you’re trying to open an account, this task is bound to meet you with its challenges.
First, we have to mention that Swiss Law enables non-residents to open a Swiss bank account at least 18 years old. Apart from this, there aren’t a lot of limitations.
Opening a Swiss bank account is challenging for non-residents trying to open accounts overseas, where they won’t seem to find everyday services of Swiss banks in other countries. Nonetheless, they can contact a Swiss bank online and resort to transactions via correspondence (the latter is usually done by post and rarely online).
To start things off, a non-resident would have to contact a Swiss bank and request an application package—which, to a resident, is the equivalent of walking into a bank and asking to open a bank account. After taking these steps, you will be provided with an account manager to guide you through the process.
Requirements for opening a Swiss bank account
Whether you’re in Switzerland or abroad, there are some ground requirements that you’ll have to meet in order to settle this. Those being your documentation and eligibility. So, prepare for a lot of paperwork, some more, and some more.
Same as any other bank in the world, Swiss banks require a certain amount of paperwork and documentation. This serves for verification of identity and sources of income, whose purpose is separating them from any illegal work their potential client might have in their portfolio. If you’re looking to open a bank account in Switzerland, the documentation you’ll need is:
- A valid passport,
- Verification of the origin of your income (this could be a statement from your last bank),
- Confirmation of the address you listed (they might choose to send some mail to your address to verify this).
However, if you’re looking to open a Swiss account from abroad, you’ll need to get your documents authorized. You can do this by getting notarized copies or an Apostille stamp, or you can visit either a local branch of your Swiss account or the correspondent bank they chose for you.
No matter how great you may be on paper, there are some countries Switzerland won’t do business with. Whether that happened due to the Embargo Act or other political exclusions, that automatically loses your eligibility.
Say this isn’t one of your problems, you can still be estimated as ‘politically exposed’, and that essentially means they think of you as sketchy or you have some public scandals behind you. In this case, your legal income and nationality won’t do much for you, and you’d still be unable to open a Swiss bank account.
Make sure you have nothing of the sort in your background, and you can get started with your account.
Transferring Money from & to Switzerland
If for any reason, you or someone you know are in immediate need of money but are afraid that the transfer is going to cost an arm and a leg, you can always turn to money-transferring services like Transferwise to make transfers to & from Swizterland* at any time, and chances are that they will be more affordable to you.
Such services tend to have more optimized processes in place that will save you time and money. In fact, Transferwise services are provided online, which means that you can use the said services from the comfort of your house. All you need to do is create a Transferwise online account, and from there, everything will go smoothly.
Choosing a Swiss Bank and Cards
Choosing the right bank for you is an important step that will save you time and cut the chances of you having to go through different banks. However, whichever bank you end up choosing, you’ll have a guaranteed safety that comes with it.
Your option is to open an account at cantonal banks, private banks, and the two big Swiss banks (UBS Group AG and Credit Suisse Group AG). These have their differences in size, requirements, and what they provide.
The two major banks operate throughout the whole country and have headquarters in many international cities, so you won’t have to worry about moving and not being able to access your bank account.
As per Financial Times, a private bank is a term that refers to private banking services and they are often private banks that are usually shared corporations.
Cantonal Banks operate in cantons—meaning they don’t mix with residents of other cantons. So, if you tend to move often, and are moving from a canton to the other, they will ask you to change banks. Furthermore, if you happen to leave Switzerland, they will ask you to close the account altogether.
Another Swiss bank is the Swiss National Bank; however, you can’t open an individual account here. SNB’s role is to supply the Swiss economy with Swiss banknotes and is in charge of coin distribution.
As specified by The Balance, non-residents usually don’t use swiss banks for daily activities. Swiss accounts’ main benefits are their privacy and stability; nonetheless, you may get a debit or credit card for spending.
Taking that into consideration, the card you’ll first want to get from a Swiss bank is a debit card; you can use this card for day-to-day things like withdrawing cash or paying in shops. If you’ve set up the account, getting this card should be a walk in the park.
However, as mentioned by Expatica, if you want a credit card, you’ll have to wait for two months, and in those two months, deposit the maximum limit of your credit card twice.
Cost of Opening a Swiss Account
As is the case with most banks, there are some fees to take care of once you set up your account. These fees are within the normal range, but there’s a way of getting around them. So, you can expect a monthly maintenance fee from CHF 10 to CHF 30. However, if you switch to electronic banking statements, take a mortgage with the said bank, or have a hefty amount of deposits, these fees will be either reduced significantly or waived.
Switzerland interest rate
In Switzerland, the Swiss National Bank (SNB) takes decisions for interest rates. Negative interest has been applied since 22 January 2015 and currently corresponds to the SNB policy rate. Now the actual Swiss bank account interest rates stand at -0.75%.
Most foreign swiss account holders have their bank account in other currencies from Swiss Francs; otherwise, they’ll have to pay the Swiss withholding tax.
Swiss Banks Secrecy
Privacy is a big reason people resort to banks in Switzerland, but as mentioned before, Switzerland isn’t the place for movie-like, top-secret accounts anymore. There’s sound reasoning behind that since, for a long period, America’s wealthy 1% has used it for tax evasion and hiding illegal money in the past.
How Privacy Works for Banking in Switzerland
Now there are strict policies in place to prevent that from happening. While a few decades back, Swiss banks wouldn’t disclose your wealth to international authorities now they have an agreement with the U.S. that makes that possible.
Although Swiss banks don’t offer the same privacy as before, they still provide numbered accounts for those interested. Based on The Economic Times, numbered accounts serve for hiding your identity from the papers—meaning numbers appear where your name would typically be. These bank accounts require a significant sum of money for maintenance and have some restrictions of their own, which is why fewer people opt for them.
As for standard accounts, your information is safe with the bank, but your name will continue to be on your financial paper trail.
After all, even righteous citizens appreciate the additional layers of privacy that Swiss banking offers.
Apart from the great transport system, quality of life, and colorful culture, Switzerland is a country well-known for its banks. To this day, Swiss banks are one, if not the safest, places in the world to store your money. So, for whatever reason you might be interested in opening a Swiss bank account, we hope this helped you ease the process. Happy banking in Switzerland!
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