I have used PostFinance as my bank for a very long time now. I have used it ever since my first pay, 14 years ago. For the most part, I am quite satisfied with it as a bank. I have a checking account and a few savings account on PostFinance. And I also have my third pillar on PostFinance. I was thinking of staying at PostFinance for most things except for my third pillar which I was thinking of moving to VIAC. However, it seems they decided otherwise.
Currently, I am not paying anything for my accounts. But PostFinance just announced that they are increasing their fees significantly (Source). Starting January 2019, I am going to have to pay 60 CHF per year for my account. This is not acceptable to me. The service will be exactly the same but for a higher price. I know this is not a lot of money. But this is the kind of things we should fight against. So I am going to change 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.
PostFinance – New fees
I have a Private account Plus on PostFinance currently. Until now, as long as I had 25’000 CHF on my account, I did not have to pay any fees. Starting from 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 on. Therefore, it is very important for every investor to minimize fees. 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 will not apply to me.
I have many accounts at PostFinance:
- One checking account. This is the account I am using for my company to pay me.
- Two savings accounts. One has actually 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. 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.
Choices for cheap bank
After I decided to leave PostFinance, I needed to choose a new bank. I was thinking that there were still a lot of choices. But it seems that Swiss banks are really poor at providing a cheap service. To compare the many banks in Switzerland, I used the comparator at moneyland. From these results and my research, I have four good choices:
- BCV (Bank of the state Of Vaud): Fees of 0 CHF per year
- Migros Bank: Fees of 6 CHF per year
- Zak: Fees of 0 CHF per year (10 CHF per year with 5 withdrawals)
- BCF (Bank of the state of Fribourg): Fees of 30 CHF minus 1 CHF interest each. 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 really 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.
The other very strong contender is Zak. Zak is a fully mobile bank. You only have an account on your phone. It is a model a bit similar to the model of Revolut, but limited to Switzerland. 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. Therefore, I estimate that I would do around 5 withdrawals per year at least. This would cost me 10 CHF per year. If I had such an ATM close to my work or home, I would go with Zak. But for now, I prefer to avoid this. Another good thing about Zak is they give you 50 CHF for joining. That would also cover the five first years of my costs.
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.
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. This is the only bank with the BCV to have a free debit card. Most debit cards in Switzerland are costing 30 CHF per year. My credit card is already at Migros. So I do not need a new credit card.
Unfortunately, Migros bank is not totally free. There are few fees. The most important fee that is difficult to avoid is 0.20 CHF for each incoming payment. I receive about 30 incoming payments on my account each year. That makes 6 CHF in fees every year. I am going to try to reduce that by moving several of the payments to my Revolut account. I will try to keep only my pay to my account. This would reduce the fees to 2.40 CHF per year.
The other important 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 cash back 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. This will two more CHF used.
There are other fees for payment abroad. But this is not an issue since I will also use my Revolut account for this.
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. This is only one of my insurance and my credit card. This is very important to tell them enough in advance. You want to make sure that the bill does not go unpaid.
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 very important to cancel e-bills. You can use e-bills again once you are on the other account. Even though e-bills make it more difficult to change bank, I still think it is so much more convenient. And it saves on paper which is also great.
I recommend keeping both accounts opened at the same time for at least one or two months. Otherwise, you are likely to miss one of the changes. This could end up in extra fees from an unpaid bill for instance. I think it is worth a few francs to avoid bigger 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 totally 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 more easy 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 bank. This will help you immensely the next time you need to do the same steps again.
Since PostFinance is raising their fees from 0 CHF to 60 CHF per year, I have to transfer to a new bank. The new fees will be effective starting next year. After some research, I decided I will switch to Migros bank. I will only pay around 6 CHF per year at Migros bank.
Changing the bank is not really 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.
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 bank. However, I do not see why I would have to pay more fees for exactly the same service. So I will do this completely emotionless 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?