How to choose your bank account?

Have you already found the bank that is best for you? So let’s continue with the different types of accounts it can offer you shall we? 

Rest assured, unlike France, where the abundance of bank accounts and investment products such as the Plan Epargne Logement (PEL), the Livret de Développement Durable (LDD), the Livret A, and many others, makes it virtually impossible to describe them all, Switzerland offers a less extensive range of accounts and investment options. That’s why we’ve prepared this short summary guide for you.

What is a current account? 

A savings account, as its name suggests, is a placement meant for saving, that is used only in cases of liquidity problems. 

It should be a solid account, a financial pillar on which you can always rely. That’s why it’s not advisable to use it for frequent transactions, such as multiple small deposits or payments, to avoid high charges.

Unlike our neighbours, savings accounts do not often have fixed interest rates. In France, for example, it is not uncommon to find accounts offering interest, sometimes even at rates in excess of 3%. Here, offers with guarantees are exceptional, truly exceptional.

To give you an idea of what’s out there, here are a few banks that continue to offer guaranteed rates:

• Raiffeisen Zürich: 0.75% -1.1
• UBS: 0.38
• PostFinance: 0.35
• Bank of Zürich: 0.34% -0.8

So let’s be clear, 0.3% is better than 0… But unfortunately these rates won’t really help you to achieve your plans or protect your retirement.
To sum up, savings accounts are good for ensuring a minimum subsistence level:

• The imminent purchase of a house
• Household repairs and maintenance
• Holiday or travel savings
• A cushion in case of a hard blow
• Putting money aside to ensure that your health insurance deductible is covered

In one sentence, savings accounts are: an amount equivalent to three or four times your monthly salary and very few transactions. 

What is a current account? 

A current account is your most dynamic account, the one where you receive your salary, from which you pay your bills as well as your daily consumption of products and services. 

It includes fees for management, withdrawal, cards, yearly documentation, etc. But is is more than necessary. 

Once sentence that would sum up current accounts is: a life without current accounts is like a sky without stars.  

By taking things a little more seriously, it is now possible to negotiate a current account so that it is free of charges or to minimise annual charges. Depending on the type of relationship you have with your bank (investment accounts, pension funds, credit cards, property projects, etc.), your bank may offer you more or less favourable terms.

What is certain is that holding a current account is essential if you want to settle in Switzerland, whether to get a job, rent or buy a home, or simply for the needs of daily life. However, don’t expect this account to contribute to the growth of your assets: it is not invested and therefore does not generate any income.

What is a joint account?

A joint account is… (the pun is too easy; we will not fall that low) an account used by two lovebirds to finance expenses they have in common. 

This might not be very romantic, but it is very efficient. Such an account represents an excellent way to calculate (and therefore to control) the expenses of the household. 

Be careful, this is going to be even less romantic: if one of the two lovebirds had debts; this account can be used to pay the entire amount of the debts. 

The joint account is often chosen by couples, but in the end it is no more and no less than an account with several holders. Each holder is free to use the funds available and has a complete and transparent view of spending.

These accounts can also be useful in various situations:

• Joint tenancy
• PPE (ownership)
• Joint investment projects

To sum up joint accounts in one sentence, I would say: good accounts make good… partners or more so, good relationships. 

What is a 3a bank account?

The account 3a, part of the pillar 3A is part of your retirement planning strategy. 

Almost every bank offer 3A accounts. While some invest part of it, offering a higher average return, as well as a higher risk. Others, on the other hand, do not offer any kind of investment. This bank account then works as a savings account but with the advantage of being non-taxable.

The 3rd pillar A is one of the most widely used accounts in Switzerland, and there is a great deal of information available online about it.
In the world of the 3rd pillar, everyone wants a piece of the cake (management fees, acquisition fees, brokerage commissions, etc.). So before jumping in head first, take the time to read as many articles on the subject as you can, watch videos (like ours, for example) and compare the offers on the market.

What is an investment account ?

As its name suggests, an investment account is an account that allows you to invest your money in order to generate growth (in the best of cases) and, over time, enable you to achieve bigger goals.
Its main purpose is to capture part of your savings (non-essential or non-vital) and generate capital gains.

Switzerland is the champion of investment banks and wealth managers. There are countless options available to people looking to optimise the management of their financial assets. Here is an overview of the services available:

Private banks

Aimed at individuals with significant capital, some private banks stand out for their ability to manage assets under certain conditions, with the main aim of increasing the value of their customers’ assets.

Conventional banks

Conventional banking institutions generally offer their customers a range of standard investment products, including investment funds and, in some cases, access to trading platforms. These services are designed to meet their customers’ day-to-day investment needs.

Asset managers

Outside the banking sector, you can also entrust the management of your assets to independent asset managers. These wealth management experts operate without being able to accept direct deposits. Customers must open an account with a partner bank and then authorise these managers to administer their assets according to their investment preferences.

Neo-banks / fintechs

The Swiss financial sector is seeing the growing emergence of new entities, ranging from subsidiaries of major banks to independent start-ups. These innovative players offer services that make it easy to open investment accounts, enhanced by advanced market analysis tools such as robot advisory and personalised investor profiles. Their aim is to provide a vast selection of predefined financial products, while offering the possibility of putting together a tailor-made investment portfolio.

Each option offers specific advantages, tailored to the different profiles and financial objectives of investors, from traditional management to the more personalised and innovative approach of fintechs.