What is the best broker in Switzerland in 2021?

Mr. The Poor Swiss | Updated: | Investing
What is the best broker in Switzerland in 2020?

(Disclosure: Some of the links below may be affiliate links)

I have talked about several brokers on this blog. But I have not yet answered the question of which one is the best broker in Switzerland!

This article will answer this important question. There are several Swiss brokers, and most Swiss banks have their broker service. But some international brokers are also available in Switzerland.

If you want to invest in the stock market, you will need a broker account. So, before you can invest, you will need to choose a broker account. You need to choose carefully since changing brokers is neither easy nor free. Therefore, it is essential to pick the best broker possible.

By the end of this article, you will know exactly which broker you should use as a Swiss passive investor in ETF!

How to choose a broker?

Choosing a broker is not very difficult, but it is a very important decision.

You are likely to use it for many years. You can always switch to a new broker. But moving your shares to a new broker is not free and not straightforward to do. So, it is better to start with the right decision directly. Ideally, you want to start with the best broker for your needs.

The first thing you need to ensure is that you only trade with a reputable broker. You will entrust your investments with this broker. So you want a broker with a good reputation and excellent security.

Mainly, you need to ensure that the broker will hold your assets separately from the broker’s legal entity. That way, if the broker defaults, you can still reclaim your assets through the secondary entity. This is called asset segregation, and it is something that any proper broker will do.

The second thing you should check is whether the broker gives you access to the exchanges you need. For instance, if you want to trade in Swiss stocks, you will need access to the Swiss Stock Exchange (SWX).

Due to a bad set of laws, it is currently challenging to access Exchange Traded Funds (ETFs) from the U.S. Indeed, European investors cannot currently invest in these funds. And only Interactive Brokers (among the affordable brokers) will offer Swiss investors access to these U.S. ETFs. So, if you want to invest in these funds, your choice is overly limited.

Finally, you need to look at the prices of transactions. This is the main issue with most Swiss brokers. They are terribly expensive. As we will see later, there can be a huge difference in fees between different brokers. Most people do not realize this! When you compare brokers, you will see that the difference is too big to ignore!

Out of these three criteria, the third one is the one that requires the most research. Finding reputable and safe brokers is not very difficult. But finding an affordable broker giving you access to the stock exchanges you need is not always easy. If you do your research properly, you will directly start using the best broker for your needs.

The best brokers in Switzerland

As I said before, there are many options. You can probably trade directly with your bank. But Swiss banks are costly for trading. It would be convenient to trade directly with your bank. Unfortunately, they are too expensive. So, you should not trade with your bank.

There are a few okay options with Swiss online brokers:

These are already much more interesting than trading with your bank. But they are not cheap either.

Finally, there are several international online brokers available for Swiss investors:

These two brokers are the best options available for Switzerland. They are significantly cheaper than all the other options available in Switzerland. They may not be Swiss, but they offer all their services to Swiss investors. This makes them the two best brokers in Switzerland.

To see that it is the case, we will compare the fees of the different brokers. We can also consider the fact that you do not have to pay Swiss Stamp Tax with them.

Comparison of the brokerage fees

We can quickly compare the fees of some of these brokers for some operations.

I cannot make a comparison of all the brokers available because there are too many. So I picked the most popular brokers in Switzerland. I included two bank brokers, two online swiss brokers, and two international brokers. This should give a good set of brokers for comparison. This should definitely help to show what are the best brokers in Switzerland.

Here are the fees for these 6 brokers for a few examples of operations on Swiss and American stock exchanges. I used the share prices of April 16th for the comparison. Here are all the data I have collected:

Action Postfinance Migros CornerTrader Swissquote DEGIRO Interactive Brokers
Custody Fees 90 CHF / year 0.23% / year
Min 50 CHF
35 CHF / quarter
If inactive
0.025% / quarter
Min 15 CHF
Max 50 CHF
0 CHF 0 CHF
Buy 10 CHSPI shares 25 CHF 40 CHF 20 CHF 9 CHF 2.35 EUR 5 CHF
Buy 100 CHSPI shares 50 CHF 40 CHF 23 CHF 9 CHF 5.55 EUR 5 CHF
Buy 10 NOVN shares 15 CHF 40 CHF 20 CHF 20 CHF 5.42 CHF 5 CHF
Buy 100 NOVN shares 35 CHF 40 CHF 20 CHF 30 CHF 9.23 CHF 5 CHF
Buy 10 MSFT shares 35 USD 40 CHF 25 CHF 25 USD 0.54 EUR 0.35 USD
Buy 100 MSFT shares 70 USD 40 CHF 25 CHF 80 USD 0.90 EUR 0.36 USD

Or, if you prefer, here is the data in graphical format:

Swiss Broker Transaction Fees
Swiss Broker Transaction Fees

As we can expect, the Swiss traditional brokers are in a terrible position. Swiss online brokers are slightly better. SwissQuote is not as bad in some cases, except for USD shares. The worst would be Migros since they do not have a maximum on their custody fees, which is a terrible drag once you have a large portfolio.

In most cases, Interactive Brokers is the cheapest broker. It is followed by DEGIRO. So our two online foreign brokers are significantly cheaper than the others. In the worst case, IB is 222 times cheaper than Swissquote!

On average, if you are doing big enough transactions, both DEGIRO and IB will be much cheaper than the other brokers. They are always among the cheapest and are never in the most expensive options. For me, this shows that DEGIRO and IB are the best brokers available in Switzerland.

If you would like to have more brokers included in this comparison, let me know, I can extend the list if many people are interested. I know that some people want to have a Swiss broker. For them, I have an article where I compare the best Swiss brokers.

Swiss Stamp Tax

In Switzerland, there is a tax called the Swiss Stamp Tax  (or Swiss Stamp Duty). This is also called the Swiss Securities Transfer Tax. This is a federal tax.

This levies a tax on each transfer of securities when a Swiss securities dealer is involved in. By Swiss securities dealer, the tax means Swiss banks and Swiss brokers.

The amount of the tax depends on the exchange:

  • Swiss securities: 0.075% fee
  • Foreign securities: 0.15% fee

This tax only applies to Swiss securities dealers, not foreign securities dealers! This means that by choosing a non-Swiss broker, you will save on the Swiss Stamp Tax! Since this tax is levied in both directions (buy and sell), by using a Swiss Broker, you are effectively losing 0.30% of your transactions! Over the years, this can quickly add up to a large amount!

This tax effectively moves people away from Swiss brokers. This law officially makes foreign brokers the best brokers for Switzerland.

For more information, read my article on the Swiss Stamp Tax Duty.

The two best brokers in Switzerland

As we could see from the comparison, the choice is fairly easy. From a fee point of view, only Interactive Brokers and DEGIRO are good choices. All the others are too expensive. Interactive Brokers is the cheapest of the available brokers.

For me, Interactive Brokers is definitely the best broker available in Switzerland. Even though DEGIRO is also cheap, it cannot fully compare with IB.

There is one big difference currently between these two brokers. Only Interactive Brokers currently offers access to U.S. ETF. So, if you want to invest in U.S. ETF, you will need to use IB. This is only the case for ETFs. Both brokers are giving access to all other U.S. securities.

Aside from these two differences, they are both excellent brokers. DEGIRO is a bit more expensive for currency exchange. This makes it a bit more expensive for a Swiss investor. On the other hand, DEGIRO is cheaper for European securities. So it makes DEGIRO interesting for European investors. And European investors do not have access to U.S. ETFs anyway, so they have more choices of brokers.

IB is a bit cheaper and offers excellent foreign exchange trading. And it offers tons of features and analysis tools. This comes at the price of complexity. At first sight, Interactive Brokers is quite intimidating. But it has become better and better over the years. As a simple investor, you will only need a small portion of all the features of IB.

Interactive Brokers – The best broker

Best Broker for Swiss Investors
Interactive Brokers

Interactive Brokers is an outstanding broker, with extremely affordable fees! Trade U.S. security for as little as 0.5 USD!

As mentioned before, Interactive Brokers is the only one of the two best brokers to give you access to U.S. ETFs. So, if you plan to invest in them, IB should be your choice. It is my favorite broker, the one I use and the one I recommend!

Interactive Brokers is a broker from the United States. But if you are in Europe, you will use its United Kingdom subsidiary. But this remains the same broker. It is a very well-established broker, funded in 1978. It has many customers all over the world.

Although it is a low-cost broker, it offers many features. They offer access to almost all instruments available in many stock exchanges. You can trade in stocks, contracts, options, and other derivatives. And they have a great platform for FOREX trading. For passive investors, you will have many more features than you need.

The biggest disadvantage of IB is that it is sometimes a bit obscure to use. IB has many different user interfaces, and at the beginning, it is not very clear which one should be used.

Other than that, IB is an excellent broker!

If you are interested, I have a guide on opening an account at Interactive Brokers and a guide on trading ETFs with Interactive Brokers.

DEGIRO – The simplest broker

DEGIRO is the broker I have started with. It is a good and cheap broker. It is relatively simple to use. However, they are much less professional than IB.

DEGIRO is a broker from The Netherlands that is available to most countries in Europe. They started in 2008 already, and they have been growing really fast since that time. Now, they are one of the major brokers in Europe.

One disadvantage of DEGIRO is that it does not offer proper FOREX trading. You cannot hold different currencies in your account. This means that your cash is converted automatically when you make a trade in another currency.

And you will have to pay fees for these transactions. This makes it a little more expensive than IB when your base currency is not the currency of your main ETF.

On some transactions, it can also be a bit more expensive than Interactive Brokers. But unless you are doing substantial transactions, this should not be a  big difference.

A big limitation is that DEGIRO does not let Swiss investors invest in U.S. ETFs. For starting investors and people that do not plan to invest a large amount of money, this is probably fine. But with a large portfolio, you can save a significant amount of money investing in these U.S. ETFs.

Finally, you need to be aware that, by default, DEGIRO will lend your shares to other investors. You can avoid this by opting for the Custody account, but you will pay some significant fees on dividends.

If you are interested, I have a tutorial on how to open an account with DEGIRO.

Conclusion

Best Broker for Swiss Investors
Interactive Brokers

Interactive Brokers is an outstanding broker, with extremely affordable fees! Trade U.S. security for as little as 0.5 USD!

Interactive Brokers and DEGIRO are the best brokers available in Switzerland. They are both reputable and safe brokers. And they are the cheapest brokers available in Switzerland. Moreover, you will save on the Swiss Stamp Duty that you only have to pay with Swiss brokers.

Swiss brokers are working fine, and there is nothing fundamentally wrong with them. But they are much more expensive than online foreign brokers. And when you add the Swiss Stamp Duty on top of that, the difference is quite large. When you invest, you do not want to waste your returns on fees. So, you need to minimize the fees. And for that, you need to choose the best brokers.

I strongly believe that Interactive Brokers is the best broker for Swiss investors in all cases. There are only very few cases where DEGIRO is slightly cheaper than Interactive Brokers. And IB is a much more complete solution for investors. It also has a better reputation. Finally, given that they offer access to U.S. ETFs, IB can help you save a lot of money. If you want, here is a guide on how to get started with Interactive Brokers.

Now, some people are uncomfortable having their shares in a foreign broker. For these people, I have found the best Swiss brokers.

If you want even more detail about the best brokers in Switzerland, read the full comparison of Interactive Brokers and DEGIRO! You may be surprised by the results!

What about you? What is the best broker for you?

Mr. The Poor Swiss is the author behind thepoorswiss.com. In 2017, he realized that he was falling into the trap of lifestyle inflation. He decided to cut on his expenses and increase his income. This blog is relating his story and findings. In 2019, he is saving more than 50% of his income. He made it a goal to reach Financial Independence. You can send Mr. The Poor Swiss a message here.

120 thoughts on “What is the best broker in Switzerland in 2021?”

  1. Hello Sir,
    Very informative article. IB indeed is the best broker for swiss investors.
    I have just one question from swiss tax filing perspective. For swiss income tax/ weath tax calculation purposes, does IB provides any certificate for swiss customers? Or is there an alternative?

    Thanks and Regards

    1. Hi Aby,

      It does not provide any certificate, but an annual statement. I have always used the annual statement for my needs. And I have never had any issues with the tax office with them.

      Thanks for stopping by!

      1. Hi Mr. The Poor Swiss,
        With IB if you have ETFs like VT (US based), do you need to do any extra work while filling the taxes in Switzerland? Could you point me to a good reference to understand better what’s expected to be done?
        Thanks a lot! and great work behind the blog! like it!

        1. Hi,

          It’s slightly more complicated if you want to reclaim the taxes paid in the U.S. for the dividends. But it’s really not rocket science.
          I do not have a good reference for that. But you just have to fill the DA-1 form and insert the dividends withholding paid to the U.S.

          Thanks for stopping by!

  2. Hello,
    which broker in Switzerland offers penny stocks?
    Postfinance and Degiro not, since i tried…
    thank you for your feedback.
    Paolo

  3. hi Mr. The Poor Swiss,

    Happy New Year.

    In the article above you mentioned if there is a need to update (extend your bank/trader) comparison table you would like to know about it.

    I have to applicants for your list please.

    Would you please check and update your table above by adding the following two options:

    Firstrade
    Strateo

    Thank you in advance.
    Regards,
    Roland

  4. After being 1hr waiting on the phone I gave up…but they just replied to my email:

    Dear XXX XXX, Thank you for bringing this to our notice. Please note that this is a known issue and has currently been escalated to our developers. We shall be responding to you as soon as we have an update. Regards, Suryakumar I. IBKR Business Development

    Not sure why there is html in there :)

      1. Hi. Wonder if you ever heard back on the outcome of this issue? Was it resolved or is it really no longer possible to sign up from Switzerland? (Hope not!)

        1. Hi David,

          I have not heard back about this issue. Hopefully, this has been resolved. Since I have not heard any more issues, I am assuming it works now. But there is only one way to find out :)

  5. IB does not seem to accept a new Swiss based private client anymore.

    This is what I got yesterday:
    “Currently we do not accept applications of this type from your jurisdiction.”

  6. Hello there and happy new year!
    What do you think about IB and Brexit? It’s quite unclear what will happen about protection.
    Do you think it’s still fine if they move your account to Ireland?

    Have a nice day from Tessin!

    1. Hi Wavemotion,

      If an account is moved from IB UK to IB IE (or LUX), this account would lose the protection of SIPC that is provided by IB UK as a special protection. So basically, we go from a 500K protection to a 20K protection.
      Now, for Swiss investors, we should apparently not be moved because we are not part of the European Economic Area (EEA). So, nothing should change.
      I do not think it’s a huge disaster since this protection would not always help. But it’s definitely a hit for protection for people that get moved. IB would still be the best broker since all other brokers will have the same protection at this stage.

      Thanks for stopping by!

      1. Hello again,
        wow, I just tried to open an “individual” account and :

        Currently we do not accept applications of this type from your jurisdiction.

        :(

        Just dropped them an email.

  7. I really like your analysis.
    I‘m a beginner in trading and I haven‘t decided which broker I want to use.

    I d‘like to invest not more than 5000.- CHF. I think DEGIRO is the best broker for this?

    I don‘t think I will invest more than 100k.

    Have you some „articles“ how to start with trading?

  8. DEGIRO – The simplest broker
    DEGIRO is the broker I have started with. It is a good and cheap broker. It is relatively simple to use. However, they are much less professional than DEGIRO.

    1. Hi Steve,

      I have never looked into details. It seems to be on the same level as IB, maybe even cheaper if you only use stocks and ETFs.
      I never tested it but since they do not have a CH IBAN, you’ll probably pay fees on deposits of CHF.

      Thanks for stopping by!

  9. Fantastic post! Very comprehensive and super informative!
    I am trying to find a Swiss-registered broker that offers the ability to trade RFQ ‘Request for Quote’ on broker-driven stocks e.g. London list AIM stocks. Degiro & Interactive Brokers do not offer this and the Int’l brokers that do not have an entity here in Switzerland.
    If you or someone else know any Swiss broker that offers this, please could you let me know?

    Regards

    1. Hi Daren,

      Thanks for your kind words :)

      I am afraid I have no idea regarding your question. I really only trade stocks and never made much research into brokers for other features.
      Hopefully, somebody else will know?

      Thanks for stopping by!

Leave a Reply

Your comment may not appear instantly since it has to go through moderation. Your email address will not be published. Required fields are marked *