Medium-term notes are bonds with fixed interest rates that are issued by Swiss banks, primarily to private customers. These securities have terms ranging between one and 10 years. Some banks offer fixed deposit accounts instead of medium-term notes. Like medium-term notes, these fixed deposit accounts have a fixed interest rate.
The interest rates of medium-term notes have begun to climb as a result of the Swiss National Bank (SNB) raising its interest rates in June, 2022. Since then, the SNB has again raised its interest rates several times, and medium-term notes have climbed to match. “While it often takes a long time for the interest rates of savings accounts to change, the interest rates of medium-term notes have reacted promptly to the SNB’s decisions,” says moneyland.ch analyst Felix Oeschger.
Currently, the average annual interest rates are 1.32 percent for 2-year notes, 1.42 percent for 5-year notes, and 1.61 percent for 10-year notes. By comparison, the average annual interest rate across savings accounts for adults is 0.53 percent.
“At the moment, medium-term notes yield more interest than savings accounts,” says moneyland.ch CEO Benjamin Manz. Medium-term notes are considered relatively safe investments, and also benefit from depositor protection up to 100,000 francs. But a disadvantage compared to savings accounts is that the money is blocked for the selected term.
Sharp rise in demand
The interactive medium-term note comparison on moneyland.ch has experienced a major spike in traffic since the end of last year. Many Swiss banks have confirmed to moneyland.ch that demand for medium-term notes and similar products like fixed deposit accounts has drastically increased since the negative-interest phase ended last year.
Some banks stopped issuing new medium-term notes altogether during the negative interest phase, and only reinstated the product at the end of 2022. Medium-term notes are primarily used by private individuals who shy away from riskier investments like stocks, but are not satisfied with the interest rates of savings accounts.
Big differences between banks
The average interest rates of medium-term notes and fixed deposit accounts are currently much higher than those of savings accounts. But there are major differences between individual Swiss banks. The medium-term note comparison on moneyland.ch shows that offers from different banks range between 0.125 percent and 1.95 percent interest per annum for 2-year medium-term notes, between 0.5 and 2.25 percent for 5-year notes, and between 0.8 and 2.75 percent for 10-year notes.
Good to know: Depending on the bank, medium-term notes and fixed deposit accounts can generate costs. These costs detract from yields. The interactive moneyland.ch comparison accounts for these costs. “When looking to invest in medium-term notes, you should always compare the costs in addition to interest rates,” recommends Felix Oeschger.
Top 10: The highest-yield medium-term notes with a 2-year term
| Bank |
Annual interest rate |
| Hypo Vorarlberg |
1.95% |
| BancaStato |
1.78% |
| Banca Popolare di Sondrio |
1.70% |
| Clientis Biene Bank im Rheintal |
1.60% |
| Baloise Bank |
1.50% |
| Bank SLM |
1.50% |
| Cembra Money Bank |
1.50% |
| Bank WIR |
1.47% |
| Crédit Agricole next bank |
1.45% |
| GRB Glarner Regionalbank |
1.45% |
| Regiobank Solothurn |
1.45% |
| Schwyzer Kantonalbank |
1.45% |
The medium-term note on moneyland.ch accounts for the interest rates of more than 50 Swiss banks. The table above shows the highest interest rates for medium-term notes in Swiss francs, without accounting for costs, as per June 12, 2023. Interest rates offered for new medium-term notes can change at any time.
Top 10: The highest-yield medium-term notes with a 5-year term
| Bank |
Annual interest rate |
| Cembra Money Bank |
2.25% |
| Hypo Vorarlberg |
1.95% |
| Banca Popolare di Sondrio |
1.7% |
| Bank WIR |
1.62% |
| BancaStato |
1.61% |
| Bank SLM |
1.6% |
| Clientis Sparkasse Sense |
1.6% |
| GRB Glarner Regionalbank |
1.6% |
| Baloise Bank |
1.55% |
| Appenzeller Kantonalbank |
1.5% |
| BBO Bank Brienz Oberhasli |
1.5% |
| Caisse d'Epargne d'Aubonne |
1.5% |
| Genfer Kantonalbank |
1.5% |
| Walliser Kantonalbank |
1.5% |
The medium-term note comparison on moneyland.ch accounts for the interest rates of more than 50 Swiss banks. The table above shows the highest interest rates for medium-term notes in Swiss francs, without accounting for costs, as per June 12, 2023. Interest rates offered for new medium-term notes can change at any time.
Top 10: The highest-yield medium-term notes with a 10-year term
| Bank |
Annual interest rate |
| Cembra Money Bank |
2.75% |
| Hypo Vorarlberg |
2% |
| GRB Glarner Regionalbank |
1.85% |
| Spar + Leihkasse Riggisberg |
1.8% |
| Bank SLM |
1.75% |
| Banca Popolare di Sondrio |
1.7% |
| Bank BSU Genossenschaft |
1.7% |
| Clientis Biene Bank im Rheintal |
1.7% |
| Clientis Sparcassa 1816 |
1.7% |
| Sparkasse Schwyz |
1.7% |
The medium-term note comparison on moneyland.ch accounts for the interest rates of more than 50 Swiss banks. The table above shows the highest interest rates for medium-term notes in Swiss francs, without accounting for costs, as per June 12, 2023. Interest rates offered for new medium-term notes can change at any time.
Historical developments
Throughout the low-to-negative interest phase which began in 2015, the yields offered by medium-term notes were barely higher than those of savings accounts and private accounts. For example, at the start of 2022, the average annual interest rate for 2-year notes was just 0.04 percent. Average rates for 5-year and 10-year medium-term notes were 0.11 and 0.37 percent, respectively.
Outlook
What stands out at the moment are the small differences between long-term and short-term notes. The interest rate of a 10-year medium-term note is just 0.29 percentage points higher than that of a 2-year note. That indicates that the market expects that interest rate levels will stabilize soon, and then fall again over the coming years.
Whether or not the SNB’s key interest rate hikes will be sufficient to sustainably keep inflation below 2 percent is not clear at the moment. “I do not expect to see interest rate levels go down by a notable amount this year, nor in the coming year,” evaluates Felix Oeschger. It is possible that the interest rates of Swiss medium-term notes will remain the same or even climb over the coming months.
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