How Swiss Bank Accounts Work

Credit Suisse bank in Zurich.

Courtesy of Sidonius Creative Commons Atribution-Share Alike License 2.5

Swiss Banks and Accounts

The Swiss, and those banking in Switzerland, enjoy the benefit of having access to numerous bank types. Both a "universal" bank as well as a number of more specialized bank types make up the Swiss banking system. Swiss universal banks can provide all kinds of banking services for their clients from lending to asset management to traditional deposit accounts and financial analysis.

  • The "big 2"Of the 400 or so banks in Switzerland, the two largest are Union Bank of Switzerland (now called UBS AG after its merger in 1998 with Swiss Bank Corporation) and the Credit Suisse Group. These two banks together account for over 50 percent of the balance sheet total of all banks in Switzerland. You can find a directory of Swiss banks here.
  • Regional and localSwitzerland has many small universal banks that focus on lending and traditional deposit accounts. By restricting their business to one region they gain customer proximity, become more knowledgeable with local news and events and also with regional business cycles.
  • CantonalSwitzerland is made up of 26 official "cantons," or states. Currently, there are 24 Cantonal banks. Cantonal banks are either 100 percent-owned or majority-owned by the cantons and must be managed in accordance with proper business principles. Their history goes back more than a hundred years, offering low-cost loans and secure investment opportunities since the 19th century. Individual Cantonal Banks operate primarily in the market of their home canton. All the Cantonal Banks account for around 30 percent of banking business in Switzerland and have a combined balance sheet total of more than 300 billion Swiss francs.
How Swiss Bank Accounts Work

Cantons of Switzerland

Courtesy of Mschlindwein GNU Free Documentation License

  • Raiffeisen GroupWith over 1,200 locations throughout the country (the highest number of branches), the Raiffeisen Group is Switzerland's third largest bank. Raiffeisen Group banks have strong local roots and have been around for more than a century. They are affiliated with the Swiss Union, which is responsible for the Group's risk management, coordination of the Group's activities, and framework for each individual banks' business activities, which enables the banks to focus on their true business-advising clients and selling banking services.
  • PrivateSwitzerland's private banks are individually owned, have collective and limited partnerships and are among the oldest banks in Switzerland. They focus primarily on asset management for private clients and do not publicly offer to accept savings deposits.
  • ForeignSwitzerland also has several foreign-controlled banks, meaning over half of the company's votes are held by foreigners with qualified interests. Ownership is predominantly held by nations of the EU (over 50 percent), followed by Japanese (around 20 percent).
About the Accounts

There are many levels of bank accounts. For Swiss residents, there are "current" accounts, which are useful for day-to-day management of your money, but pay little interest; "salary" accounts pay slightly more interest than current accounts, but without check writing capabilities and/or some other services; and "saving" accounts offer higher interest, but are not very useful for many transactions. Most nonresidents of Switzerland want Swiss accounts for their investment opportunities and privacy -- the more investment options and guidance you want, the higher the required balance.

  • Numbered accountsProbably the most noted and infamous Swiss bank account is the "numbered" account. As implied, these accounts have numbers associated with them (or sometimes a code word) rather than a name. Even so, there will always be a select few at the bank that must know the name that goes with the account. So, contrary to popular belief, there is no such thing as an "anonymous" Swiss bank account. Even though Swiss bankers must maintain silence regarding their clients and client accounts, there are always records of ownership.
  • Dormant accountsAs with anything that's "secret," you have to deal with what happens when one of the few people who know about it die. Accounts whose owners die without having passed on information to others concerning the existence of the account become dormant after a period of time. The account can be passed on to heirs but that becomes difficult if no one knows about it and the bank doesn't know you've died.Your banker could try to search for you, but that would "spill the beans" so to speak. After 10 years of no contact, however, the bank has a legal obligation to search for you. If they can't find you, or if they learn you have died, they will search for your heirs. If they can't find any heirs, they will report the account to the Swiss banking ombudsman, an official who represents the public by investigating complaints made by individual citizens.Therefore, it's important to take some measures to make sure your money goes to people you want it to. For example, give the banker another contact person that he can contact if he doesn't hear from you for a specific period of time (that person still doesn't have to know about the account). Or, you could have information about the account stored in a special envelope to only be opened when you die [Source:].