How to open a deposit in a Swiss bank?

Opening an account in a Swiss bank is traditionally associated with reliability, confidentiality and financial stability. However, despite the obvious advantages, the process of opening an account in one of the most prestigious places for investment banks can be difficult, especially for non-residents.

In this article, we will tell you how to properly open a deposit in a Swiss bank so that your capital is safe and you can enjoy all the benefits of Swiss banking.

Why is it worth opening a deposit in a Swiss bank?

Switzerland has long established itself as one of the world leaders in banking services. Its financial system is built on the principles of stability, confidentiality and protection of clients’ interests, which makes Swiss banks attractive to depositors from all over the world.

Key reasons why you should consider opening a deposit in a Swiss bank:

1. High level of reliability and stability

Switzerland is known for its political and economic stability and, importantly in today’s reality, neutrality, making it one of the safest jurisdictions for storing capital. Swiss banks have high credit ratings and comply with strict regulatory standards, which minimises risks for depositors.

2. Confidentiality and data

Swiss banking secrecy laws are among the strictest in the world. Despite changes in the international financial environment, Swiss banks continue to provide a high level of confidentiality for their clients, which is especially important for those who value their privacy.

3. Wide choice of financial instruments

Swiss banks offer a wide range of savings products and investment services, allowing customers to choose the best options depending on their financial goals and preferences. Whether it is a term deposit, a savings account or an investment portfolio, Swiss banks provide access to the most diverse and advantageous offers.

4. Professional asset management

Clients of Swiss banks can count on the services of experienced financial consultants and asset managers who will help to create and implement an optimal investment strategy. This is especially important for those who want not only to preserve but also to increase their savings.

5. Access to exclusive investment products

Swiss banks offer unique and carefully selected investment portfolios that include a variety of assets such as stocks, bonds, real estate, bank products and alternative investments. These portfolios are often managed by experienced investment professionals, allowing access to quality investment opportunities that are not available in other countries.

Conditions for opening a deposit in Switzerland

Opening a Swiss bank account is subject to certain conditions, which may vary depending on the bank and account type chosen. Below we will look at the main factors to consider when opening a deposit in Switzerland.

1. Minimum deposit amount: Swiss banks generally set minimum amounts for opening an account, which can vary significantly depending on the account type and the client’s status. For standard accounts, the minimum amount can be between 5,000 and 500,000 Swiss francs (CHF) or the equivalent in another currency. However, for premium investment accounts or clients seeking individual terms, the minimum amounts can be significantly higher – from 1,000,000 CHF or even 5,000,000 CHF.
2. Minimum balance maintenance: Almost all Swiss banks require a minimum balance to be maintained in the account. Minimum amounts can vary depending on the bank and the account type, for example, from 10,000 to 500,000 Swiss francs (CHF) or more. Failure to comply with this requirement may result in a reduced interest rate or additional fees for maintaining such an account.
3. Requirements for confirmation of sources of funds: Opening an account in a Swiss bank necessarily requires clients to provide extensive confirmation of the legality of the sources of funds. This may include tax returns, contracts, income certificates and other documents. But even this does not always guarantee that the bank will not refuse service. After all, Swiss banks take everything into account: personal and business reputation, banking history, letters of recommendation, the holder’s residency and his political activity.

Each Swiss bank has its own specific requirements and conditions for opening an account, so it is important to clarify all the details and prepare the necessary documents in advance. Bcorp provides advice and assistance in the process of opening a deposit in Switzerland, ensuring compliance with all requirements and simplifying interaction with the bank.

Account types and interest accrual terms

• Swiss banks offer several types of accounts, each with its own terms:
• Term deposits: The rate is fixed for a certain period, usually from 1 month to 5 years. Interest rates on these accounts depend on the term and amount of the deposit. Early withdrawal is possible but usually comes with penalties.
• Savings accounts: A more flexible option that allows you to deposit and withdraw funds at any time. Interest rates on these accounts are usually lower than on term deposits, but they offer greater liquidity.
• Savings accounts: Combine elements of term deposits and savings accounts. The depositor must notify the bank of the intention to withdraw funds within a certain period (for example, 3 or 6 months) to avoid penalties.
• Foreign currency deposits: Deposits opened in foreign currencies are also popular with international clients. The terms of such accounts may include additional risks related to currency fluctuations but may also offer higher interest rates depending on the currency.
• Fiduciary deposits: This is a special type of deposit where the bank manages your funds on your behalf. The main advantage of a fiduciary account is that the interest earned is not subject to the 35% withholding tax that normally applies to standard deposits in Switzerland. Instead of tax, the client pays the bank a fee for managing the account, which is usually around 0.5% per annum.

Choosing the right account type depends on your financial goals, timeframe, and preferences for profitability and liquidity.

Tax liabilities of deposit holders in Switzerland

Owning an investment account or deposit in a Swiss bank comes with certain tax obligations that are important to consider both when opening the account and when managing the funds. These obligations depend on both Swiss law and the tax rules of the depositor’s country of residence. It is, therefore, important to know the main tax aspects that depositors in Switzerland need to consider.

1. Withholding tax

One of the key taxes that may be applied to income from a Swiss account is the withholding tax on interest accrued on funds. This tax is called the withholding tax and amounts to 35% of the accrued interest. The tax is withheld by the bank directly upon accrual of income and transferred to the Swiss tax authorities.

However, if the owner of the funds is not a resident of Switzerland, he may be able to apply for a refund of part or all of the withheld tax, depending on the double taxation treaties (DTT) between Switzerland and the owner’s country of residence. A refund is possible provided that the account owner proves his tax residency in another country and documents the fact of paying taxes in his country.

2. Declaration of income in the country of residence

Income received from a Swiss bank account must be declared in the country of tax residence. This may include: interest accrued on the deposit and/or other income related to asset management or investments through the account.

3. Exchange of information between countries

Switzerland participates in the Automatic Exchange of Information (AEOI) within the framework of the international OECD standards (CRS). This means that information about funds in Swiss banks will be automatically transferred to the tax authorities of the country of residence of the holders. Ukraine has also joined the CRS, which means that it is almost impossible to hide the presence of a Swiss account from national tax authorities.

Finally, understanding and fulfilling tax obligations is a key aspect of owning an account in a Swiss bank. It is necessary to take into account both Swiss tax regulations and the requirements of the tax authorities of the country of residence in order to avoid unpleasant surprises and optimise the tax burden. If you need help in this matter, the lawyers of Bcorp are always ready to support you and help you correctly open a deposit in a Swiss bank.