A Guide to Swiss Banking

by John Gaines

Introduction

Swiss bank accounts provide strict privacy, total confidentiality and are also tax-free.

With a Swiss bank account you can also earn interest in the currency you wish to hold your account in (USD, CHF and EUR). You can also receive an international credit card and a numbered account if you choose.

Typical Swiss bank account clients

Typical Swiss bank account clients come from all walks of life, from international consultants and sales representatives to expatriates and computer programmers. In fact, anyone seeking to gain financially (possibly through trading in the capital markets, the sale of real estate, inheritance, or an insurance policy), or who wants to protect their estate in the event of divorce or inheritance, can take advantage of the benefits of Swiss banking.

Does it cost anything to open my Swiss bank account?

Opening a Swiss bank account is often free of charge.

Which documents do I need to open a Swiss account?

Opening a Swiss bank account has never been easier.

Before you arrive in Switzerland, you will be asked you to bring with you some of the following documents:

Passport

You might also be asked to send an authenticated copy of your passport’s photo page, showing your passport number, before you arrive.

Financial background

These documents show what you do for a living, for example a copy of a current bank statement, contract of employment or tax return. The exact documents required depend on the nature of your professional life.

Origin of deposits

These documents show the financial origin of your deposit. For example if you are depositing funds from the sale of a house, you might be asked to send proof of the sale, a copy of the real estate agent’s listing, or similar.

Personal Information

You are usually requested to provide only basic personal information.

This information is required in compliance with Swiss anti-money-laundering laws and to understand your banking needs. All your information should be held in strict confidence.

Swiss bank accounts for US residents

If you live in the US you can still open a Swiss bank account. However, there are some considerations.

You should not invest in any US securities from your Swiss bank account if you want to keep this account private. Also, you cannot invest in most investment funds such as mutual funds.

Security deposit

To obtain a credit card for your Swiss bank account, you will be required to make a security deposit. Depending on the bank you choose, this deposit can be as much as 1.5 to 2 times your monthly credit limit. For example, if you have a maximum monthly limit of USD 5,000, you will be asked to deposit anything from USD 7,500 to USD 10,000. This security is held in another account at the bank and invested in a fund. Your deposit will be returned to you when you cancel your credit card and pay any outstanding bills.

Question 1: Can I get a credit card without a security deposit?

No. No bank will agree to issue a card without a security deposit.

Question 2: Can the security deposit be used to pay credit card bills?

No. Bills are sent to you, and you must pay them separately. If this is inconvenient, you can always authorise your bank to debit the amount from your account and they will hold the bill until the next time you visit the branch.

Deposits & Withdrawals

 How can I deposit money in my Swiss bank account?

Once your account has been opened, you can deposit money to your account in several ways:

• Cash deposit
• Traveller's check deposit
• Securities deposit
• Transfer from another account
• Receive a bank transfer
• Personal checks
• Bank checks

Selecting the most appropriate method of deposit depends on the amount deposited, the degree of confidentiality desired and the level of convenience.

Can traveller's checks be tracked?

The issuing bank can discover where traveller's checks were cashed. In fact, you are always required to reveal your identity when making a purchase with traveller's checks. Since each check is identifiable by a unique number, it is possible to trace it. However, in practice this type of search is rarely conducted.

Can I make a deposit with a postal order?

At the time of writing this, there are no known restrictions in Switzerland regarding receiving deposits in the form of postal money orders to your Swiss bank account. However, you should verify that the postal system you are using allows you to send money to a foreign bank account.

Can I make a deposit to my Swiss bank account via Western Union?

Western Union's services are only for individuals wishing to transfer money to other individuals. At the time of writing this, it is believed not to be possible to use Western Union to deposit money to a Swiss bank account.

How can I withdraw money from my account in Switzerland?

There are several ways you can withdraw money from your Swiss bank account:

• Credit card
• Cash withdrawal
• By traveller's checks
• Bank transfers
• Checks

Selecting the most appropriate method of deposit depends on the amount deposited, the degree of confidentiality desired and the level of convenience.

Which credit cards can I use with my Swiss Bank Account?

For the fastest access to your Swiss bank account, a credit card offers the freedom to access your funds, 24 hours a day. Wherever you are, you can withdraw cash discreetly from ATMs.

How can I get a credit card?

You can acquire a credit card as long as you make a security deposit. Swiss banks do not conduct credit inquiries: the security deposit is considered to provide the security the bank requires.

Which credit card offers the most confidentiality?

Most banks offer credit cards without the bank logo. Nevertheless, experts can identify your bank by the first four digits of your credit card number.

If you wish to avoid any connection to the bank, you can, in some cases, request a card be issued by an institution other than your bank.

It is illegal for credit card companies to provide any information on cardholders. Just like the banks themselves, credit card companies are bound by Swiss professional secrecy.

How do I use a credit card discreetly?

Discreet cardholders will:

Use their credit card exclusively at ATMs

Avoid using their card in shops, restaurants and abroad*

Never pay for services in their country of residence*

The credit card slip issued during transactions contains information about your account: identification of the bank (or at least the country), your first name and last name.

Bank transfers

Generally, it takes two or three working days to transfer money from your Swiss bank account to an account in another industrialised country. However, this timeline may vary due to reasons beyond the control of your Swiss bank.

These delays may arise from a number of reasons:

The nature of your transfer

The way in which you transmit your request for payment to your bank affects the time it takes to complete a transaction. If you send your request to your bank by regular post, it should take two or three working days to process your order. Using online banking services though significantly reduces this delay.

SWIFT*

Currently, 90% of all banks worldwide use the SWIFT network to carry out international bank transfers. SWIFT is a computerised system which allows banks to exchange internationally recognised messages that indicate credited amounts and authorise debits.

Some banks in developing countries are not affiliated with the SWIFT network and transmit this kind of information by telex. As a result of this, the time taken to transfer your money can be greatly delayed.

Affiliated Banks

SWIFT only transmits a message. In order for the operation to be completed efficiently, the receiving bank must have an account at the head office of the issuing bank. Generally, every major bank holds direct accounts at the head offices of other major bank and thus an interbank transfer can easily and quickly be made.

If the receiving bank does not have an account with the issuing bank, the wire transfer must go through an affiliated bank that can link the two banks. Sometimes, it is necessary to call upon several affiliated banks in order to transfer the money to the final receiving bank. This may take longer and each intermediary may also charge a commission for their services.

Currency
A wire transfer must take place through one of the countries which issues the currency. For example, a wire transfer in US dollars paid to an Italian bank must pass through an intermediary in the United States. As a result of this, the operation may take longer, depending on the currency being transferred.

*SWIFT (Society for Worldwide Interbank Financial Telecommunication) is a company incorporated under Belgian law, whose headquarters is located in Brussels. Its role is to facilitate international banking operations through a very powerful computer network. SWIFT was founded in 1973 by 239 banks in 15 different countries and now more than 7,125 institutions in 192 countries subscribe to it.

Cheque books

Checks and check books are very rarely used in connection with a Swiss bank account. Your bank can prepare bank checks on your behalf, but this is rarely wise. The reason for this is that a check issued by your Swiss bank informs a number of people that your Swiss account exists, which imperils your confidentiality. Furthermore, it takes several weeks for a check to be completely processed.

If you wish to withdraw funds from your Swiss bank account, we would recommend using your credit cards as this is faster, more efficient and a more discreet.

Confidentiality

All Swiss banks are obliged to ensure that any information held about you or your account is strictly confidential.

Swiss bank secrecy is one of the strictest in the world and is part of an ancient Swiss tradition of privacy. Under Swiss law any banker who reveals information about you without your consent runs the risk of a prison sentence.

Privacy

The only exceptions to this rule are in regard to serious crimes such as arms smuggling and drug trafficking. In the event of accusations of tax evasion, your privacy is still guaranteed in Switzerland as failure to report income or assets is not regarded as a criminal offence in Switzerland. This means that neither the Swiss government, nor any other government, can acquire information about your bank account. Should they wish to obtain any such information, they must first convince a Swiss judge that you have committed a serious crime punishable under the Swiss Penal Code.

Private Matters

Bank secrecy will not be lifted for private matters such as inheritance or divorce as long as your banking information is held in strict confidence as is the case with nearly all Swiss bank accounts. Your account must be proven to exist if a judge wishes to pursue the case. This is why a numbered Swiss bank account provides the maximum level of confidentiality.

John Gaines

online trading, currency trading, financial service