Bank Customers Could Save 10.7 Billion Francs

Swiss bank customers are known for their reluctance to change banks. That trait comes back to bite them – at least from a financial perspective. moneyland.ch analyzed the average savings potential to estimate the amount of money which Swiss consumers unnecessarily spend on banking every year.

18,000 francs per person

The savings potential shows how much money could be saved if all private customers would migrate to the most affordable banking services. moneyland.ch analyzed savings potential for personal private accounts (including debit cards), savings accounts, pillar 3a savings accounts, pillar 3a retirement funds, credit cards, mortgages, stock brokers, and asset management. The analysis does not account for business customers.

moneyland.ch estimates the annual savings potential for all private bank customers combined at 10.7 billion francs. “Individuals who make use of all of the banking services included in the study could save 18,000 Swiss francs, on average, every year,” explains moneyland.ch CEO Benjamin Manz. Those who use banking services which are more expensive than average can save much more than that.

Mortgages: 5.5. billion francs

Mortgages are the most important source of revenue for many Swiss banks. The countrywide savings potential is also biggest for mortgages. On average, mortgagors could save 3705 francs per year by moving to the bank with the lowest interest rate. That adds up to just over 5.5 billion francs for all customers. Many homeowners still simply use the first offer made by their go-to banks without comparing, getting quotes from other lenders, or negotiating better conditions. Now that interest rates are climbing again, future savings potential may well become even higher.

Asset management: 2 billion francs

Many Swiss banks charge high fees for asset management services. Today, there are a number of digital asset management offers which are much cheaper than conventional mandates. At 13,200 francs per year, the average potential savings per year is the highest across all services – largely because of the big cost differences and the high investment amounts. For all asset management customers combined, the estimated savings potential totals 2,026 billion francs.

Private accounts: 1.2 billion francs

The average savings potential is 180 francs per year for adults, and 124 francs per year for young adults. Across all customers, the total estimated savings potential is an astounding 1259 million francs which residence could collectively save every year by using the most affordable bank accounts and debit cards. With interest rates being virtually non-existent, differences are primarily in the fees and charges – such as ongoing account fees, transaction fees, cash withdrawal costs, and fees for using debit cards to pay in Switzerland and abroad. In recent years, a number of neobanks have appeared which charge exceptionally low prices for these services.

Savings accounts: 800 million francs

Currently, Swiss savings accounts hardly offer any interest – and savings potential has, likewise, declined over the past years. But there are still individual savings accounts with somewhat higher yields. Thanks to these, Swiss bank customers could save 144 francs more per customer and year. Estimated across all customers, the collective savings potential is 799 million francs. That is how much savers could collectively profit by moving to the savings account with the highest interest rate.

Credit cards: 500 million francs

The average credit card user could save 83 francs per year – without accounting for prepaid cards and expensive platinum credit cards. All cardholders combined could save an estimated 496 million francs. Many credit card users have credit cards with above-average costs. Some could save more than 1000 francs per year by migrating to the most affordable credit card.

Stock brokers: 329 million francs

The savings potential for investing in stocks and other securities online has shot up compared to previous years. One reason for this is that new, affordable trading platforms have appeared in Switzerland. Another reason is that the coronavirus crisis and bitcoin trend have driven many more residents of Switzerland to begin trading. The average savings potential for customers who move to the cheapest Swiss stock broker is 405 francs per year. That comes to a total of 329 million francs per year. For the many people who still buy and sell securities through their go-to banks, the saving potential is much higher – as some pay thousands of francs more than necessary.

Pillar 3a retirement funds: 182 million francs

Pillar 3a retirement funds are not as popular in risk-averse Switzerland as pillar 3a savings accounts are. But at 182 million francs, the total annual savings potential is somewhat higher for retirement funds. The reason is that the average fees of retirement funds and the differences in fees charged by different funds are both major. Retirement funds have also seen an uptake in new customers thanks to the low interest rates of bank accounts, and higher spending on advertising retirement funds by banks in recent years. Aside from the administrative fees, other costs like custody fees, sales charges, and deferred sales charges may also apply. On average, retirement fund investors could each save 236 francs per year by moving to the cheapest retirement fund.

Pillar 3a savings accounts: 121 million francs

Both fees and interest rates affect the savings potential of pillar 3a retirement savings accounts. Interest rates are currently very low, at 0.05 percent. But some pillar 3a accounts still yield up to 0.25 percent interest per year. Resultingly, the average savings potential is 47 francs per customer and year – or 121 million francs for all account holders combined.

Savings potential could be even higher

The amount which a person could potentially save depends which banking products and service providers they use, says Benjamin Manz from moneyland.ch. It is also worth noting that some financial products, including bank packages, medium-term notes, vested benefits accounts, personal loans, credit card loans, and leasing offers were not accounted for in the study. “The potential savings across all available Swiss banking products would be much higher,” says Manz.

Savings potential for Swiss bank customers in 2022

All figures are annual and based on data from March, 2022.

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