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Until recently, I was using PostFinance as my primary bank. I was quite satisfied with it as a bank. And I was starting to use it for savings and investments as well. But then, they increased their fee significantly.
These new fees made me wonder, what is the best bank in Switzerland? And especially, what do I look for in a bank? Most banks in Switzerland offer the same level of service. So the most important thing to look at is their prices.
So let’s start to see what is The Best Bank in Switzerland! Or put another way, what is the cheapest bank in Switzerland?
PostFinance – New fees
At first, I was not paying anything for my accounts. But PostFinance then announced that they are increasing their fees significantly for 2019 (Source).
Starting in January 2019, I would have had to pay 60 CHF per year for my account. This fee was not acceptable to me. The service will be the same but for a higher price. I know this is not a lot of money.
But this is the kind of thing we should fight against. So I am going to change to a new bank as soon as possible. In this post, I am going to discuss the new fees and the options I have as a new bank in Switzerland.
I had a Private account Plus on PostFinance. As long as I had 25’000 CHF on my account, I did not have to pay any fees. Starting in January 2019, I will have to pay 5 CHF per month. That is 60 CHF per year.
That may not seem like much. But the fees are the thing you have the most control over. Therefore, every investor needs to minimize costs. Moreover, PostFinance is not adding any new value to their account. You are just paying more for the same thing.
For some people, there is a way to get the fees waived. You need to have 25’000 CHF invested in funds in PostFinance. Since I do not have that much money invested in funds in PostFinance, this does not apply to me. You could also have 25’000 CHF of assets in their broker.
However, PostFinance is a costly broker that cannot compare to DEGIRO or Interactive Brokers. And their funds are pretty bad and cannot compare with any good Exchange Traded Funds (ETFs). So, it is a terrible way to lock you in.
I had many accounts at PostFinance:
- One checking account. This account is the one I am using for my company to pay me.
- Two savings accounts. One has been empty for some time.
- One old investment fund with less than 200 CHF
- My third pillar in PostFinance retirement 75 Fund.
The first thing I did when I saw the news was directly to close the two savings accounts. Doing this did not reduce the fees. But it will make it easier to make the transfer to my new bank later on. Since I reduced the size of my emergency fund, it is small enough to be kept entirely in my checking account.
Moreover, I also sold the last of my PostFinance investment fund. I have kept that fund for too long already. I lost about 10 CHF in the process. But this is a small price to pay to simplify my holdings.
Cheapest banks in Switzerland
After I decided to leave PostFinance, I needed to choose a new bank. I thought that there were still a lot of choices. But it seems that Swiss banks are poor at providing an affordable service. To compare the many banks in Switzerland, I used the comparator at moneyland.
From these results and my research, I have five good choices:
- BCV (Bank of the state Of Vaud): Fees of 0 CHF per year
- Migros Bank: Fees of 6 CHF per year
- Neon: Fees of 0 CHF per year
- Zak: Fees of 0 CHF per year (10 CHF per year with five withdrawals)
- BCF (Bank of the state of Fribourg): Fees of 30 CHF minus 1 CHF interest each year. This makes for 29 CHF fees per year.
Mathematically, I should directly take the BCV offer. However, since I live in the state of Fribourg, I do not like to go to a bank of another state. If I ever have to go in person in their bank, I will have to go too far.
I still have a preference for non-digital banks, so my choice is currently Migros Bank. Since it is only 6 CHF difference, I think it is better to go with Migros bank. Moreover, since I already have my credit card at Migros, I will have one less bank to worry about. It is also good to simplify its bank accounts.
Cheapest digital banks
Now, you could save more money by opting for a digital bank instead of a brick and mortar bank. There are two other solid digital contenders: Neon and Zak. These two are mobile banks. You only have an account on your phone. It is a model a bit similar to the model of Revolut but limited to Switzerland.
Neon is a recent offer and was the first fully digital bank in Switzerland. They are entirely free if you use them properly (not too many withdrawals). And they offer free payments abroad.
The other solid contender is Zak. Zak is a digital mobile bank. Zak is entirely free if you only use Bank Cler ATMs. However, there are no such ATMs close to my home or my work or where I do my groceries.
For more information, I have a review of Neon, and I will be writing a review of Zak soon.
Migros Bank – Almost free
Migros bank is the bank of the Migros grocery shop. It is an old bank. It was founded 60 years ago, in 1958. Since I already am a customer of Migros and I shop there as well, I feel confident about this bank.
The main advantage of the bank is that the Debit Card is free. Migros Bank is the only bank with the BCV to have a free debit card. Most debit cards in Switzerland cost 30 CHF per year. My credit card is already at Migros. So I do not need a new credit card.
Unfortunately, the Migros bank is not entirely free. There are a few fees. You will pay 0.20 CHF for each incoming payment. You can avoid this by moving some of the payments to a Revolut account. It should not be an issue for most people. But this will not be possible for your salary.
The other significant fee is the withdrawal fee for ATMs other than Migros ATM. There are not that many Migros ATMs around where I live. I will have to be careful and correctly plan my cash usage. However, I do not think this will be a big problem. I am already trying to minimize my use of cash. My small credit card cashback bonus is better than no bonus on cash usage.
Moreover, I can also withdraw money in any Migros shop. There are a lot of Migros shops in Switzerland. I will try my best to keep this fee to zero. However, I will probably have to withdraw money once a year if something does not go well. I estimate this will be 2 CHF used per year.
There are other fees for payment abroad. But this is not an issue since I will also use my Revolut account for this.
Given all this, Migros Bank is currently the best Brick and Mortar bank in Switzerland.
Moving to another bank
Moving to another bank is not that simple. I need to change several things.
First of all, I need to send the information to my company to get my pay in the right account every month. Then, I need to change the things I pay with direct debit. I only pay one of my insurance and my credit card with direct debit. It is essential to tell them enough in advance. You want to make sure that the bill does not go unpaid. In the future, I will not use direct debit anymore.
I also need to change some e-bills. Fortunately, I do not have a lot of e-bills. I only have my internet and my insurance bills. Again, it is essential to cancel e-bills. You can use e-bills again once you are on the other account. These difficulties made me realize that e-bills are not as great as people think they are. They are just locking you down to a bank. I will not use e-bills again in the future. I will limit the automation of my personal finances to a minimum.
I recommend keeping both accounts open at the same time for at least one or two months. Otherwise, you are likely to miss one of the changes. Missing one change could end up in extra fees from an unpaid bill, for instance. I think it is worth a few francs to avoid higher fees.
There is one other thing that I will have to migrate. I also have my third pillar at PostFinance. Since I was already thinking of switching my third pillar to another vendor, this is not a big deal. I will sell my fund at PostFinance and then transfer my money to a new vendor. I am not sure about the new provider. But it will probably be VIAC. Expect a post to arrive soon about my choice of a third pillar!
If you are migrating to another bank, there is something I would recommend. You should try to make it easier to change bank after this one. For instance, if you are debit direct, you can transform into bills instead. If you can transform some bills into credit card payments, that will be easier.
You should also make a document keeping track of everything you needed to do to change to a new bank. This document will help you immensely the next time you need to do the same steps again.
If you want even more information, I have an entire guide on how to switch to a new bank account.
Since PostFinance is raising its fees from 0 CHF to 60 CHF per year, I had to transfer to a new bank. The new costs will be effective starting next year. It means I had to research the cheapest bank in Switzerland.
After some research, I found out that Migros Bank is now the best Brick and Mortar Bank in Switzerland. I will only pay around 6 CHF per year at Migros bank.
Changing the bank is not easy. There are many steps necessary. I will have to be careful about it. If I do it in a well-organized way, this should be fine. I will try to make most of the transfer before the end of the year. We will see if I can do it all before January. If you want more information on that, I have written an article on how to change bank account.
I have been a customer of PostFinance for more than 14 years. I would prefer to stay with them since it is a lot of work to switch banks. However, I do not see why I would have to pay more fees for precisely the same service. So I will do this entirely emotionlessly and chose the smart way about it!
What do you think about the new fees? Which bank do you use? Do you plan to leave PostFinance because of this?