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PostFinance is the bank of the Swiss Post. It is one of the largest banks in Switzerland. But is it any good?
I am going to answer this question in this article. I will look into the bank services of PostFinance in detail and see the advantages and disadvantages of this bank. They have changed many things recently with their banking packages and how they handle negative interest rates. All these changes will be included in my review.
By the end of the article, you will know whether you should use PostFinance or not.
PostFinance is the financial entity of the Swiss Post. It was already founded in 1906, so it is a very mature bank. As of 2021, it is the fifth-largest retail bank in the country. In 2020, the bank was managing 123 billion CHF in customer assets and had about 4.2 million customers. It is interesting to note that the bank has been losing customers for several years now. It already had 4.2 million customers in 2011 and almost 5 million customers at its peak in 2016.
PostFinance offers many services:
- Savings and checking accounts
- Vested benefits and third pillar accounts
- Investment funds
- Trading on the stock market, with PostFinance E-Trading
In this article, we will only focus on the banking services of PostFinance, not on their other features.
Currently, PostFinance is not allowed to grant mortgages and loans. Instead, they only offer mortgages via third parties. However, in 2021, the Federal Council announced that they were looking at privatizing PostFinance to enter the credit market. So, this lack of mortgages may change in the future.
I have used PostFinance myself for many years until they introduced new fees in 2018, and moved to Migros Bank after that. Before that, my experience was mostly positive with them.
Let’s look at the features PostFinance offers for bank accounts.
You can access your account from the e-banking web application or one of the mobile applications on Android or iPhone. And since PostFinance is a traditional bank, you can also do operations at their offices. From the application, you can do everything you expect from a bank account:
- See your balance and transactions
- Pay your bills
- Transfer money to other accounts
- Pay e-bills
As of July 2021, PostFinance will offer new banking packages and convert existing customers to these packages. So, we will focus on these banking packages in this article. There are two banking packages:
The features are the same between the two packages, but the fees are different, as we will see in the next section.
With your banking package, you get a private account in CHF or EUR. Contrary to most banks, you will get a special card, a PostFinance card. You can use this card in all ATMs and many shops. But it is not a MasterCard, Visa, or even Maestro. So, using it online is often complicated. With the package, you also get a savings account.
You can also use PostFinance with Google Pay and Apple Pay if you want to pay from your phone! And you can also use PostFinance with TWINT. That way, you will not even need a physical card to do your shopping!
So, overall, PostFinance will have more than enough features for your banking needs.
Let’s now take a look at fees for the banking packages.
You can do the basic operations for free:
- Send money to and from your account
- Pay your bills
- Pay your e-bills
- Pay with your card in shops that support the PostFinance card
If you want to withdraw money, you can withdraw for free at any PostFinance ATM (or in PostFinance offices). But if you withdraw at any other ATM, you will have to pay 2 CHF per withdrawal and 5 CHF if you withdraw money abroad.
If you want paper documents, you will pay 5 CHF. Even though I have not been using paper documents in many years, I think this is excessively expensive.
On top of that, you will pay an account management fee for each of the packages:
- Smart will cost 5 CHF per month
- SmartPlus will cost 12 CHF per month
SmartPlus has only two real advantages over Smart:
- You get free withdrawals at any ATM in Switzerland
- You get free withdrawals abroad
Also, you get a 50 CHF discount on PostFinance credit cards. However, this is not an advantage since there are better and free credit cards available.
So, overall, unless you withdraw a lot of money at other ATMs, the SmartPlus account does not make sense. I would even argue that the SmartPlus package does not make sense at all. Paying 7 CHF per month more just to get free withdrawals is a colossal ripoff. I do not understand their banking packages. So, in any case, I would strongly advise against the SmartPlus package. It is just way too expensive for its value.
5 CHF per month is relatively reasonable for the Smart banking package. However, there are better and free bank accounts available in Switzerland that will have other advantages as well!
There is one way you can get lower fees: by investing your money with PostFinance. For example, if you have 25’000 invested with PostFinance (e-trading, funds, or third pillar), you will get 5 CHF per month out of your bill. So, the Smart account will be free, while the SmartPlus will cost 7 CHF per month.
The problem with that approach is that PostFinance products are expensive and sub-optimal. I would not recommend investing in any of their products. So, investing in PostFinance will cost you more than what you will save on the fees. So, I would prefer paying 5 CHF per month to PostFinance rather than have 25K of my assets invested with them. However, the PostFinance e-trading offering is not too bad. So investing in ETFs with PostFinance would be alright. But I would not recommend their funds.
On top of that, if you have more than 100’000 CHF on your account, you will pay a negative interest rate of 0.75% on the amount of money that is higher than the threshold. If you have a lot of money invested in PostFinance assets, the threshold can be higher. Even if this is not great, most people should not have that much money in their PostFinance account. Having that much cash probably means that they should invest some of it or diversify across banks.
Overall, the fees are not catastrophic (there are some more expensive banks in Switzerland), but they are not good. Indeed, there are some much cheaper banks available and with better advantages (no currency conversion fee, for instance!).
We should look at what other users think of PostFinance.
Let’s start with Postfinance Reviews on TrustPilot. There are 230 reviews at the time of this writing, with a horrible average score of 1.2 (out of 5 stars). This score is the worst I have seen on TrustPilot for a bank. People complain about basically every aspect of PostFinance:
- Constantly introducing new fees without new features
- Very difficult to reach the customer service
- The new app (introduce in 2020) is worse than the old one without any advantages
- Slow transactions
And if we look at the positive reviews, there are four 5-star reviews from the same person out of 9 reviews. This is a bad sign.
If we look at the reviews of the app on Google Play, it is not better. There are almost 20’000 ratings, with an average score of 1.7 (out of 5 stars). A lot of the ratings are complaining that the new app is significantly worse than the previous one. There are still a few reviews that say that they are happy with the new one, but overall, the reviews are awful.
And the reviews of the app on the App Store are barely better. Out of 6’660 ratings, the app got a score of 2.2 (out of 5 stars). The reviews are consistent with the reviews from the Android side, with slightly more positive reviews (or maybe more nuanced reviews).
So, overall, we can easily say that PostFinance currently has a poor reputation from its customers. I can see the difference in reputation compared to 5-10 years ago where everybody was satisfied with PostFinance. Then everything went downhill with more fees, poor communication, and fewer features.
We also need to take a look at the security of using PostFinance as a bank account.
Before October 2017, PostFinance had a special state guarantee for its customers. This state guarantee was protecting assets without limits. This is the same protection that many cantonal banks have in Switzerland. However, this state guarantee has been revoked, and PostFinance is now protected by Esisuisse like most Swiss banks. So, in case it bankrupts, customer assets are protected up to 100’000 CHF.
However, since Esisuisse has a limit of 6 billion CHF and PostFinance has more than four million customers, the guarantee would only be on average 1’500 CHF per customer. This is a disadvantage of Esisuisse since larger banks are less protected than small ones.
Nevertheless, PostFinance currently has an excellent credit rating and is in good financial health.
As for technical security, PostFinance has high standards of security. They are using multiple factors of authentication. They are also providing some good security information on their website, which is always a good sign.
So, overall, I would say that it is currently safe to have your assets with PostFinance.
Let’s summarize the disadvantages of PostFinance:
- Expensive bank accounts
- Trying to make you invest in sub-optimal products
- Very poor reputation from its customers
- Expensive currency conversions
- A negative interest rate for more than 100’000 CHF
- Limited bank protection in case of bankruptcy
- The PostFinance is not the most practical card
- The SmartPlus banking package does not make sense
- Non-standard card (a Mastercard of Visa would be better)
Let’s summarize the advantages of PostFinance:
- Multiple applications to access your account (mobile and web)
- Good technical security
- Support for TWINT
- Support for e-bills
Overall, I see no significant advantage to PostFinance. The Smart banking package is not particularly expensive, but there are cheaper alternatives out there. You could reduce your fees by using their investment products, but there are much better alternatives out there, so you should not do that.
For instance, if you want a truly digital bank account, I would recommend Neon over PostFinance. With Neon, you will have a free bank account, free currency conversions abroad, and cheap transfers in foreign currencies. And you will have a proper Mastercard instead of a non-standard card. Except for the 30K daily limit, I can only see advantages to Neon. If you want more information, I have a review of Neon.
Or, if you are looking for a traditional bank, I would recommend Migros Bank over PostFinance. With Migros Bank, you will pay only 3 CHF per month, and if you have more than 7500 CHF in your account, you will not pay any account management fees. On top of that, you will have the same features as PostFinance. So, you get the same, but cheaper. Again, I have a review of Migros Bank if you need more information.
What about you? What do you think about PostFinance?