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You need a broker account to invest in the stock market. And many Swiss investors only feel comfortable having a broker from Switzerland or at least a broker with an office in Switzerland.
So, we need to compare these Swiss brokers and see which is best for a Swiss investor to invest in the stock market.
In this article, I compare six Swiss brokers in different scenarios and see which is the best (the cheapest!).
What makes the best Swiss broker?
Swiss brokers are extremely similar. They are all regulated similarly, and most have the same features. What matters most in choosing the best Swiss broker is the price!
Some people will argue that we must look at their tools and reporting capability. But this is not a good criterion for most investors. For a passive investor, you need to be able to buy shares of ETFs. That is it.
It does not matter how shiny the graphs of your net worth are or how many possible algorithms you can use for active trading. What matters is to minimize the price you will pay for your transactions.
I spend less than 10 minutes a month on my broker account. I do not care how beautiful or how easy it is. I want to be able to buy the ETFs from my portfolio at a low cost. And I want my money to be safe.
The other thing that matters is that the broker gives you access to the stock exchanges we need. In the case of a Swiss broker, we need at least access to the Swiss stock exchange. We also need access to the major European Stock Exchanges. Ideally, we want access to U.S. ETFs as well. Unfortunately, not all Swiss brokers still give you this access.
Even without U.S. ETFs, it would be great to have access to the major U.S. stock exchanges. Although passive investing is the way for most people, many investors still want access to American companies.
So, I compare some Swiss brokers over different scenarios. And for each scenario, we see which one is the cheapest. This article is not meant to be a review of these brokers. But I have reviews of most of these brokers.
Some Swiss Brokers
I have selected six Swiss brokers for this comparison:
- Swissquote, an online broker. You can read my complete Swissquote review for more information.
- PostFinance, the Swiss Post Bank. My complete review of PostFinance E-trading is also available.
- Saxo Bank, an investment with a branch in Switzerland.
- CornerTrader, an online broker. I have a complete CornerTrader review for more information.
- Migros Bank, the bank from Migros.
- FlowBank, a new online broker. You can read my full review of FlowBank for more info.
These are brokers that many people are using in Switzerland. And they are the cheapest brokers that I was able to find.
CornerTrader has two accounts useful for passive investors: Private and Capital. Capital is cheaper than Private and only requires you to have 75’000 CHF on your account. So, I will compare the fees for these two accounts.
Saxo also has several account types depending on the trading volume. Unfortunately, it is not clear how much trading volume is necessary. So, I assume we are using the Saxo Classic account.
I also wanted to include Strateo since it is reasonably priced. Unfortunately, Saxo Bank bought Strateo. Interestingly, Saxo Bank is significantly more expensive than Strateo. So, instead of lowering their prices, Swiss Banks are buying cheaper competitors. This gives you an idea of how little they care about their customers.
All of these brokers give you access to many stock exchanges. You will have to pay the Swiss Stamp Tax Duty with all Swiss brokers, so we will ignore it in our comparisons because it would be the same anyway.
I will start by comparing several individual fees of each broker. And then, I will run through some scenarios to see more in detail which is best.
Custody Fees of Swiss brokers
First, we look at the custody fees of these brokers.
A custody fee is something you pay just to keep your account open. Often, the custody fee is expressed as a percentage of the value of your portfolio. Also, these fees often have a minimum and sometimes a maximum.
The custody fee is significant because you will pay it as long as you have an account. If you plan to retire on your portfolio, a large custody fee will make it more difficult during the accumulation and withdrawal phases.
Here are the custody fees of our six brokers:
- Swissquote has a 0.025% quarterly fee, with a min of 15 CHF and a maximum of 50 CHF. They also have an extra 0.03% if your assets reach over a million CHF.
- PostFinance has a 90 CHF per year custody fee. But users can use this as trading credits, so this is both an inactivity fee and a custody fee.
- Saxo Bank has a 0.18% yearly custody fee, with a monthly minimum of 5 CHF.
- CornerTrader has no custody fees.
- Migros has a 0.23% custody fee below 750K, 0.21% until 1.5M, and 0.19% after that, and a yearly minimum of 50 CHF.
- FlowBank has a 0.10% custody fee with a minimum of 10 CHF per quarter and a maximum of 50 CHF per quarter.
Here are the custody fees you would pay with these brokers:
From this chart, the conclusion should be fairly obvious. Neither Saxo Bank nor Migros Bank looks to be a good fit for a Swiss investor. To manage a one million CHF portfolio with Saxo Bank, you would pay 1800 CHF per year, and with Migros Bank, you would pay 2100 CHF per year! This is bad.
In comparison, all the other brokers are pretty good on that note. To see better, here is the same graph without Saxo Bank and Migros Bank:
The best is always CornerTrader since they have no custody fees. And the most expensive brokers are Swissquote and FlowBank because they have the highest maximum. But to me, they all look acceptable. For small portfolios, FlowBank can sometimes be cheap as well since they have a small minimum.
You should not worry too much about a 200 CHF custody fee for large portfolios. However, the 0.03% fee for Swissquote on large portfolios (more than a million) can make a large difference if you have to pay that during retirement.
The second fee we need to look at is the inactivity fee.
Some brokers charge a fee when you do not do any action on your account during a specific period. It is very close to a custody fee, but it is only charged when you do not use your account.
This fee is not as crucial as the custody fee since you will not pay it during the accumulation phase. But if you plan to retire on your portfolio, it is still important because you will pay it during your entire retirement.
Out of the six brokers, only two of them have inactivity fees. Saxo Bank charges 89 CHF per quarter without trade. And CornerTrader charges 35 CHF per quarter without trade.
Here is the yearly inactivity fee for each of the Swiss brokers:
Once again, Saxo Bank is pretty bad, with more than 300 CHF per year of inactivity fees. CornerTrader had no custody fees, but their inactivity fees are significant. This is why it is important to always consider everything. All the other brokers have no inactivity fee. On the other hand, 300 CHF per year is not such a bad amount, especially compared to the amounts you have to pay in custody fees at SAXO Bank.
Buy shares of Swiss ETF with a Swiss broker
The next fee we will look at is the fee to buy shares of Swiss ETF. A Swiss investor is likely making several such transactions per year.
Here are the fees for ETFs on the Swiss Stock Exchange:
- Swissquote: 9 CHF
- PostFinance: From 15 CHF to 350 CHF based on the order size
- Saxo Bank: 0.10% with a minimum of 20 CHF
- CornerTrader Private: 0.20% with a minimum of 20 CHF
- CornerTrader Capital: 0.12% with a minimum of 18 CHF
- Migros Bank: 40 CHF
- FlowBank: free!
Here are fees for one buy operation of a Swiss ETF with different order sizes:
Since it is free for these ETFs, FlowBank is the cheapest broker to buy Swiss ETFs. After Flowbank, Swissquote is the most affordable broker. Swissquote and FlowBank are significantly cheaper than the other brokers.
The other ones are relatively comparable. Migros Bank is quite expensive for operations up to 25’000 CHF. After this, it is becoming relatively okay. And PostFinance is not bad for small operations but pretty bad for large operations.
Buy shares of European ETFs with a Swiss broker
We can do the same exercise with European ETFs.
A Swiss investor who wants to diversify globally must invest in European ETFs. There are much more ETFs on the European Stock Exchange than on the Swiss Stock Exchange.
For this example, I take Euronext Paris as an example. The fees are slightly different for some brokers based on which European Stock Exchange is being used.
Here are the fees for ETFs on the Euronext Stock Exchange:
- Swissquote: From 5 EUR to 190 EUR based on the order size
- PostFinance: From 25 EUR to 350 EUR based on the order size
- Saxo Bank: 0.10% with a minimum of 10 EUR
- CornerTrader Private: 0.25% with a minimum of 25 EUR
- CornerTrader Capital: 0.20% with a minimum of 20 EUR
- Migros Bank: 40 EUR
- FlowBank: 0.15% with a minimum of 6.50 EUR
Here are fees for one buy operation of a European ETF with different order sizes:
For operations below 10’000 EUR, FlowBank is the cheapest broker again. However, below 1000, Swissquote is slightly cheaper, but the difference is barely significant. After this, Saxo is significantly better than the others. With a minimum of only 10 EUR and a low percentage fee, Saxo Bank is quite interesting for trading European ETFs.
All the others are more expensive in this case. After Saxo bank and FlowBank, the third cheapest Swiss broker is CornerTrader with its Capital account.
Buy shares of U.S. companies with a Swiss broker
The last fee we will look at is the fee to buy shares of U.S. companies.
Even though this is not passive investing, it is interesting because many passive investors still buy some shares of companies. And in general, they are buying shares of American companies. For brokers that allow buying U.S. ETFs, this will be the same fees.
Here are the fees for stocks on the NYSE:
- Swissquote: From 5 USD to 190 USD based on the order size
- PostFinance: From 25 USD to 350 USD based on the order size
- Saxo Bank: 2 cents per share with a minimum of 20 USD
- CornerTrader Private: 4 cents per share with a minimum of 25 USD
- CornerTrader Capital: 2 cents per share with a minimum of 12 USD
- Migros Bank: 40 USD
- FlowBank 0.15% with a minimum of 6.50 USD
Here are fees for one buy operation of a U.S. stock with different order sizes:
For small operations, FlowBank is the cheapest broker. Below 1000 USD, Swissquote is very slightly cheaper than FlowBank. Starting from 10’000 USD, CornerTrader becomes the cheapest broker. FlowBank and CornerTrader have small minimums, making them significantly cheaper than the others. For large operations, both Swissquote and PostFinance are pretty bad in this situation. Just after FlowBank and CornerTrader, Saxo Bank is relatively cheap as well.
Interestingly, FlowBank is the cheapest broker for these three operations as long as they are small. The second cheapest broker was different for each case.
Currency Exchange Fees
Finally, before moving into the different scenarios, we need to consider the currency exchange fees. If you want to buy an ETF in EUR, you must convert your CHF to EUR.
Here are the currency conversion fees of these six brokers:
- Swissquote: 0.95%
- PostFinance: 1.20%
- Saxo Bank: 1%
- CornerTrader: 0.50% with a minimum of 10 CHF
- Migros Bank: 1%
- FlowBank: 0.50%
These fees are the same for CHF to USD and CHF to EUR. You may have to pay higher fees if you use more minor currencies. But these fees are all significant already!
Here are the fees for one conversion from CHF to USD for different order sizes:
It is easy to conclude from this graph: FlowBank and CornerTrader have a fair price, and all the others are much more expensive. Even with a minimum of 10 CHF, the 0.50% fee compared to the average 1% of the other Swiss brokers makes FlowBank and CornerTrader the only good Swiss brokers for currency conversion.
Scenario 1: One Swiss ETF per month
Until now, we have only considered a single operation in isolation. But it is much more interesting to look at everything together. We need to look at a year of trading with transaction and custody fees together.
One first scenario is for an investor that buys shares of one Swiss ETF (in CHF) per month. Many Swiss investors are only using the Swiss Stock Exchange. Since we need to consider the custody fee, we must run the scenario with several portfolio sizes.
Also, since the prices change based on the order size, we must choose an order size. For this scenario, the investor is buying 2000 CHF worth of shares every month. 2000 CHF is a good average for monthly investing.
So without further ado, let’s take a look at the fees of each of these brokers for one year for this scenario:
We can see that Swiss Investors should entirely ignore both Migros Bank and Saxo Bank. Their custody fees are too high for any serious investor. So, let’s see this graph again with the reasonable brokers:
That looks better already. FlowBank is always cheaper than other brokers. In that case, you do not pay transaction fees, only custody fees, making it very cheap to invest monthly in a Swiss ETF. After this, Swissquote is great for small portfolios, while CornerTrader is great for larger portfolios, but the differences are not very significant.
So, overall, in this scenario, I would use either FlowBank or Swissquote.
Scenario 2: One European ETF per month
A more interesting scenario would be to invest in ETFs on the European Stock Exchanges. Again, we look at one entire year of trading.
We will use a monthly investment of 2000 EUR in European ETFs for this scenario. And again, since custody fees are a thing, we will use different portfolio sizes.
As expected, the two brokers with bad custody fees need to be ignored again. So, here is the graph again without them:
We can see that when adding currency conversion fees into the scenario, the results are a little different, and everything is more expensive. With this, I would not recommend PostFinance anymore because of its bad currency conversion fee.
Once again, FlowBank is excellent for small portfolios and quite suitable for large portfolios too. Swissquote is okay for small but not necessarily good for large portfolios, where CornerTrader and FlowBank are the best choices.
In this scenario, I would personally use FlowBank. But the differences are not very significant once we remove the high custody fees brokers.
Scenario 3: Withdraw once a year
For our last scenario, let’s take something different.
The other two scenarios would represent an investor during the accumulation phase. Now, we can take a scenario that would represent the retirement phase.
If you want to retire based on your portfolio, you must sell shares to live from it. So, our scenario investor is selling for 60’000 CHF every year to live from his portfolio. Since custody fees will play into this scenario, we need different portfolio sizes.
First, let’s start with an investor selling for 60’000 CHF of a Swiss ETF at the beginning of the year:
This is where we can see the impact of high custody fees. In retirement, you have no income, and you could give your broker several thousand Swiss francs yearly! I would not recommend anyone to invest with such a broker! You need to find a broker with which the custody fee has a maximum.
Let’s see the other four choices:
With the extra fee starting at one million CHF, Swissquote is quite expensive for retired people living from their investments.
After this, there is barely any difference between the brokers. There is a 50 CHF per year difference here between the cheapest and the most expensive one. This difference does not matter.
To avoid inactivity fees, we can also withdraw money each month. Withdrawing every month also has the advantage of keeping your money invested longer. If the money is withdrawn each month instead, the results are still very similar:
The differences are about the same here. 100 CHF per year is not a huge difference. Nevertheless, CornerTrader is the cheapest option once again. And Swissquote is significantly more expensive given its extra fee.
Some people will argue that selling each quarter would be optimal to avoid the inactivity and large transaction fees. But this is a meaningless optimization. It will make very little difference whatsoever. You should withdraw either once a year or once a month. Ideally, once a month will have better returns in the long term since you keep the money in the market as long as possible. But of course, there are other things to take into account.
Finally, we can see what happens when we sell ETF shares on the European stock exchange instead of on the Swiss Stock Exchange. Here are the results with our four affordable Swiss brokers:
This time, the difference is more significant due to currency conversion fees. FlowBank and CornerTrader get better than the others due to being twice cheaper at converting currencies.
In that scenario, I would use either FlowBank or CornerTrader.
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Swiss brokers are expensive, but you can find some brokers cheaper than others if you search well. If you want a Swiss broker, I recommend Swissquote. They have reasonable fees. Also, Swissquote has a good reputation and is well-established.
Swissquote is the best swiss broker, in my opinion. I would use Swissquote myself if I were to use a Swiss broker. However, it is not perfect. Its fees are average, rarely the best. And the extra fee starting at one million CHF is bad news for retirement.
FlowBank is interesting as well, but I feel like they are currently too young to recommend them. But if you want to try different brokers, they are an excellent second choice. They will very likely be the cheapest broker for you.
Another important conclusion from this article is that serious investors should not use a broker with a custody fee without a maximum. This becomes very quickly too expensive. For this reason, I would not recommend using either Saxo Bank or Migros Bank. They are way too expensive and will drag your returns down. And some Swiss brokers are even more expensive than these two. So, Swiss investors should be careful.
If you are ready to use a foreign broker, I recommend investing with Interactive Brokers, which is cheaper. However, if you are afraid of having your money outside of Switzerland, it is much better to use a Swiss broker than not to invest at all! And since many of my readers requested this from me so often, I feel like I had to write this article. I hope that cheaper brokers will come in the future.
If you want more details on the two winners, you can read their reviews:
If you think investing fees can be taken lightly, you should read my article about investing fees and their impact.
What is your favorite Swiss broker?
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