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Banks receive significantly more interest from the National Bank than they pay savers. They make millions from it.
Many cantonal banks are presenting their half-year results in these weeks. These make you sit up and take notice: records here and there. The Geneva Cantonal Bank delivered the best half-year result in its history on Tuesday. Likewise the Bündner Kantonalbank. In its half-yearly balance sheet, it achieves a “best mark”, as it writes in its communication.
Lucrative interest rate business
The reason for the high profits lies in the interest business. The banks owe him more than half of their earnings. The calculation is simple: Financial institutions currently receive interest of 1.75 percent on their deposits (current accounts) at the National Bank, but only up to a certain limit.
Legend: The banks are currently earning quite well. This can be seen in the half-year figures of the cantonal banks, which are currently being presented. imago images/Archive/Manuel Geisser
The effective interest rate that a bank receives from the National Bank can therefore vary from bank to bank. However, the National Bank’s interest rate is still significantly higher than that which the institutes pass on to their savers. In total, all Swiss banks have around 500 billion francs in current accounts at the National Bank.
Big differences in the banks
The VZ Vermögenszentrum has compared the interest rates of the individual banks. For example, based on assets of CHF 60,000 in a savings account, the Geneva Cantonal Bank pays only 0.3 percent interest and thus the lowest of all cantonal banks.
Zuger and Luzerner Kantonalbank are significantly more generous and thus at the upper end of the scale with one percent interest. On average, the cantonal bank pays around 0.7 percent interest on savings accounts. This is clearly not enough for consumer protection. “We now expect the banks to take responsibility and, on the one hand, take on the costs of keeping accounts, but on the other hand also significantly increase interest on savings,” says André Bähler, Head of Politics and Economics at Consumer Protection. One percent interest is the minimum. According to VZ, the only bank above that is not a cantonal bank, but Cembra Money Bank. She pays 1.25 percent interest.
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The only option left to customers is to switch to a bank that offers higher interest rates. “But that is not done in most cases,” says Andreas Akermann from VZ, “it’s like the health insurance companies – we experience bank customers as very lazy to change. The banks therefore feel no pressure to adjust their savings rates upwards.”
This not only eliminates competition among banks, the passive behavior of savers can cost money. “If a customer with assets of 60,000 francs, for example, switched from the institute that offers the lowest interest rates to the bank with the highest interest rates, she would save 4,308 francs in ten years just from the difference in interest rates,” Akermann calculates. If customers still had mortgages or online trading with the same bank, they could just switch their savings to another bank to benefit from higher interest rates.
For SRF News, VZ Vermögenszentrum compared and evaluated the interest rates charged by Swiss banks (with savings of CHF 60,000, CHF 120,000 and CHF 270,000).