Swiss banks are known for their high-quality services and low fees. With the advent of blockchain, these institutions will be able to offer even more innovative solutions to the market.
The Swiss forex brokers is a term that has been used for decades. It is the best option for those who want to trade in the Swiss Franc.
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You’ll need a broker account if you wish to invest in the stock market. Many Swiss investors prefer to work with a broker who is based in Switzerland, or at the very least has an office there.
As a result, we must evaluate different Swiss brokers to determine which one is the best for a Swiss investor to invest in the stock market.
In this post, I evaluate six Swiss brokers based on several situations to determine which is the best (and cheapest!).
What characteristics distinguish the finest Swiss broker?
Swiss brokers have a lot in common. They’re all governed in the same manner, and the majority of them share the same characteristics. The pricing is the most important factor to consider when selecting the finest Swiss broker!
Some would argue that we should additionally consider their tools and reporting capabilities. However, I do not believe this is a criteria. You must be able to purchase ETF shares as a passive investor. It makes no difference how gleaming your net worth graphs are or how many active trading algorithms you can use. What important is that you pay the least amount possible for your transactions.
Every month, I spend less than 10 minutes on my broker account. Anything makes no difference to me how beautiful or simple it is. I want to be able to purchase my portfolio’s ETFs at a reasonable cost.
The broker must also provide you with access to the stock markets that we need. We need at the very least access to the Swiss stock market in the case of a Swiss broker. Access to the main European stock exchanges is also required. We’d want to have access to US ETFs as well. Regrettably, not all Swiss brokers still provide this service.
Even if there were no U.S. ETFs, having access to the main U.S. stock markets would be beneficial. Despite the fact that most individuals choose passive investing, many investors still desire to invest in American businesses.
As a result, I’m going to compare several Swiss brokers in various situations. And we’ll compare the costs of each scenario to determine which is the most cost-effective. The purpose of this essay is not to provide an evaluation of these brokers.
Brokers from Switzerland
For this comparison, I’ve chosen six Swiss brokers:
- Swissquote is a web-based broker. For additional details, see my Swissquote review in its entirety.
- The Swiss Post Bank is PostFinance. My full PostFinance E-trading evaluation is also accessible.
- Saxo Bank is a financial institution having a branch in Switzerland.
- CornerTrader is a web-based broker. For additional details, check out my CornerTrader review.
- Migros Bank is the Migros bank.
- A new online broker, FlowBank. For additional information, see my complete FlowBank review.
These are brokers that a lot of people in Switzerland use. They are also the most affordable brokers I could locate.
For passive investors, CornerTrader offers two distinct accounts: Private and Capital. Capital is less expensive than Private and just needs a deposit of 75’000 CHF. As a result, I’ll compare the costs of these two accounts.
Saxo offers a variety of account kinds, each of which is based on the trading volume. Regrettably, it is unclear how much trade volume is required. So, I’m guessing we’re on the Saxo Classic plan.
Because it is reasonably priced, I also decided to put Strateo in the list. Unfortunately, Saxo Bank has purchased it. Saxo Bank, on the other hand, is considerably more costly than Strateo. As a result, rather of reducing their costs, Swiss banks are purchasing lower-cost rivals. This should give you a sense of how unconcerned they are with their clients.
All of these brokers provide you with access to a number of different stock markets. Because all Swiss brokers will need you to pay the Swiss Stamp Tax Duty, we will disregard it in our comparisons because it will be the same in any case.
I’ll begin by comparing many of each broker’s unique costs. Then I’ll go through various situations to determine which one is better in greater detail.
Fees for Custody
First, we’ll look at the custody costs charged by various brokers. A custody charge is a cost you must pay in order to keep your account open. Custody fees are often stated as a percentage of your portfolio’s worth. In addition, these fees often have a minimum and, on occasion, a maximum.
Because you’ll be paying it as long as you have an account, the custody charge is important to consider. A high custody charge will make it more difficult to retire on your portfolio throughout the buildup and withdrawal periods if you intend to do so.
The following are the custody costs charged by our six brokers:
- Swissquote charges a quarterly cost of 0.025 percent, with a minimum of 15 CHF and a maximum of 50 CHF.
- PostFinance charges a yearly custody fee of 90 CHF. However, since this may be used as trade credits, it is both an inactivity and a custody cost.
- Saxo Bank charges a monthly custody fee of 0.18 percent, with a monthly minimum of 5 CHF.
- There are no custodial costs with CornerTrader.
- Migros charges a 0.23 percent custody fee for amounts under 750 thousand CHF, 0.21 percent till 1.5 million CHF, and 0.19 percent beyond that, with an annual minimum of 50 CHF.
- The custody charge at FlowBank is 0.10 percent, with a minimum of 10 CHF and a maximum of 50 CHF each quarter.
The following are the custody costs you’d be charged by various brokers:
Comparison of Swiss Brokers’ Custody Fees
The conclusion should be pretty clear from this graph. For a Swiss investor, neither Saxo Bank nor Migros Bank seem to be a suitable match. You would spend 1800 CHF per year to manage a one million CHF portfolio with Saxo Bank, and 2100 CHF per year to manage a one million CHF portfolio with Migros Bank! This is a disaster.
On that point, all of the other brokers compare well. Here’s the same graph sans Saxo Bank and Migros Bank for a better understanding:
The lowest Swiss Brokers’ custody costs are compared.
CornerTrader is usually the best since there are no custody costs. Swissquote and FlowBank are the most costly brokers since they have the largest maximum. However, they all seem to be okay to me. Because of their low minimum, FlowBank may be a good option for small portfolios.
Fee for Inactivity
The inactivity charge is the second fee to consider. When you don’t do anything with your account for a specific length of time, some brokers charge you a fee. It’s similar to a custody fee, except it’s only applied when your account isn’t used.
Because you will not be paying this charge throughout the accumulation period, it is not as significant as the custody fee. However, if you intend to retire on your portfolio, it is still crucial since you will be paying it for the rest of your life.
Only two of the six brokers charge fees for inactivity. Without trading, Saxo Bank costs 89 CHF each quarter. Without trading, CornerTrader costs 35 CHF each quarter.
The annual inactivity charge for each Swiss broker is as follows:
Swiss Brokers’ Inactivity on a Year-to-Year Basis
Saxo Bank is terrible once again, with an inactivity charge of almost 300 CHF each year. CornerTrader has no custody costs, however they do have hefty inactivity fees. This is why it’s important to think about everything. All other brokers do not charge an inactivity fee. However, 300 CHF a year is not a terrible sum, especially when compared to the sums you must pay in SAXO Bank custody costs.
Purchase Swiss ETF shares.
The second charge we’ll look at is the cost of purchasing Swiss ETF shares. Each year, a Swiss investor is likely to make many such purchases.
Fees for ETFs on the Swiss Stock Exchange are as follows:
- 9 CHF Swissquote
- PostFinance: Depending on the order size, from 15 CHF to 350 CHF.
- 0.10 percent with a minimum of 20 CHF at Saxo Bank.
- 0.20 percent with a minimum of 20 CHF for CornerTrader Private
- CornerTrader Capital: 0.12% with a minimum deposit of 18 CHF.
- Migros Bank: CHF 40
- 0.10 percent with a minimum of 6.50 CHF in FlowBank
Fees for a single purchase transaction of a Swiss ETF with various order amounts are shown below:
Fees for purchasing Swiss ETF shares via Swiss Brokers
FlowBank is the cheapest broker to purchase Swiss ETFs for transactions under 10,000 CHF. Swissquote becomes the lowest broker for activities larger than that. These two brokers are much less expensive than the others. Other than that, they’re all very similar. For transactions up to 25’000 CHF, Migros Bank is very pricey. After that, things start to get a little better. And although PostFinance isn’t terrible for small businesses, it’s a disaster for larger ones.
Invest in European exchange-traded funds (ETFs).
The similar procedure may be performed with European ETFs. If a Swiss investor wishes to diversify internationally, he or she will need to invest in European exchange-traded funds (ETFs). The European Stock Exchanges have a considerably larger number of ETFs than the Swiss Stock Exchange.
I’ll use Euronext Paris as an example in this case. Some brokers charge somewhat varying fees depending on which European Stock Exchange they utilize.
Fees for ETFs on the Euronext Stock Exchange are as follows:
- Swissquote: Depending on the order amount, prices range from 25 EUR to 190 EUR.
- PostFinance: Depending on the order amount, from 25 EUR to 350 EUR.
- 0.10 percent with a minimum of 10 EUR at Saxo Bank
- Private CornerTrader: 0.25 percent with a minimum deposit of 25 EUR
- 0.20 percent with a minimum of 20 EUR CornerTrader Capital
- Bank Migros: 40 EUR
- 0.15 percent with a minimum of 6.50 EUR at FlowBank
Fees for a single purchase transaction of a European ETF with various order sizes are shown below:
Fees for buying European ETFs (Euronext Paris) via Swiss Brokers
FlowBank is the cheapest broker for transactions under 10,000 CHF once again. After that, Saxo is clearly superior than the rest. Saxo Bank is a good option for trading European ETFs since it has a low minimum deposit of just 10 EUR and a low percentage charge. In this instance, all of the others are somewhat costly. CornerTrader’s Capital account is the third cheapest Swiss broker after Saxo Bank and FlowBank.
Purchase stocks in U.S. corporations.
The final charge we’ll look at is the cost of purchasing stock in a US company. Even though this isn’t passive investing, it’s worth noting since many passive investors still purchase stock. They are also purchasing shares in American businesses in general. This will be the same costs for brokers that enable you to purchase US ETFs.
The following are the fees for equities traded on the New York Stock Exchange:
- Swissquote: Depending on the order size, from 15 USD to 190 USD.
- PostFinance: Depending on the order quantity, from $25 to $350.
- 2 cents per share with a minimum of 20 dollars at Saxo Bank.
- CornerTrader Private: 4 cents per share, with a $25 minimum.
- CornerTrader Capital is 2 cents per share with a minimum investment of 12 dollars.
- Migros Bank: 40 dollars
- 0.15 percent FlowBank with a minimum of 6.50 USD
Fees for a single purchase operation of a U.S. stock with various order amounts are as follows:
Fees for purchasing shares in a publicly traded business in the United States (NYSE) via Swiss Brokers.
FlowBank is the cheapest broker for small businesses once again. CornerTrader is the cheapest broker starting at 10,000 CHF. FlowBank and CornerTrader both have minimal minimums, making them considerably less expensive than the competition. Swissquote and PostFinance are both very terrible in this scenario for big businesses. Following in the footsteps of FlowBank and CornerTrader, Saxo Bank is also reasonably priced.
Surprisingly, FlowBank was the least expensive broker for all three businesses as long as they were small. Each instance had a different second-cheapest broker.
Fees for Currency Exchange
Finally, we must consider currency conversion costs before going on to the other situations. To purchase an ETF in EUR, you must first convert your CHF to EUR.
The following are the currency conversion costs charged by each of these six brokers:
- 0.95 percent, according to Swissquote.
- 1.20 percent post-finance
- Saxo Bank has a 1% stake in the company.
- 0.50 percent with a minimum of 10 CHF for CornerTrader
- Migros Bank has a 1% interest rate.
- 0.50 percent FlowBank
The costs for CHF to USD and CHF to EUR are the same. You may have to pay more fees if you utilize more minor currencies. These costs, however, are all substantial!
The following are the costs for a single CHF to USD conversion for various order sizes:
Swiss Brokers’ Currency Conversion Fees
It’s pretty easy to draw a clear conclusion from this graph: FlowBank and CornerTrader have a reasonable pricing, while the others are much more costly. FlowBank and CornerTrader are the only excellent Swiss brokers for currency conversion, even with a minimum of 10 CHF. The 0.5 percent charge compared to the average 1 percent of the other Swiss brokers makes FlowBank and CornerTrader the only good Swiss brokers for currency conversion.
Scenario 1: Each month, one Swiss ETF
We’ve just looked at one operation at a time up until now. However, looking at everything at once is much more fascinating. For this, we’ll need to look at a full year of trading, including both transaction and custody costs.
One initial scenario is a monthly purchase of one Swiss ETF (in CHF) by an investor. The Swiss Stock Exchange is used exclusively by many Swiss investors. We need to run the scenario with various portfolio sizes since we need to account for the custody cost. Also, since costs vary depending on order size, we must choose an order size. The investor is purchasing 2000 CHF worth of shares per month in this situation. A monthly investment of 2000 CHF is a decent average.
So, without further ado, here are the fees for each of these brokers over the course of a year in this scenario:
Fees charged by Swiss Brokers for investing in Swiss ETFs on a monthly basis.
We can tell right away that Migros Bank and Saxo Bank should be completely avoided by Swiss investors. For any serious investor, their custody costs are much too expensive. So, let’s have a look at this graph with the reasonable brokers:
Fees charged by Swiss Brokers for investing in Swiss ETFs on a monthly basis.
That’s already looking better. There isn’t much of a distinction between these two brokers. Overall, PostFinance is the most costly. Small portfolios should utilize FlowBank, followed by Swissquote, while big portfolios should use CornerTrader because of the cheaper custody costs.
Overall, I would choose either Swissquote or FlowBank in this situation.
Scenario 2: Each month, one European ETF
Investing in ETFs on European Stock Exchanges is now a more appealing situation. We’re going to look at a whole year of trade this time.
We’ll utilize a monthly investment of 2000 EUR in European ETFs for this scenario. Again, since there are custody costs, we’ll utilize various portfolio sizes.
Fees charged by Swiss Brokers for investing in European ETFs on a monthly basis.
As anticipated, the two brokers with poor custody fees must be overlooked once again. So, without them, here’s the graph:
Fees charged by Swiss Brokers for investing in European ETFs on a monthly basis.
When currency translation costs are included into the equation, the results are somewhat different, and everything becomes more costly. As a result of this, I would no longer recommend PostFinance due to their poor currency conversion cost. FlowBank is ideal for small and medium-sized portfolios, as well as big portfolios. Swissquote is fine for modest portfolios, but not so much for big ones, where CornerTrader and FlowBank are the best options.
I would personally utilize FlowBank in this situation.
Scenario 3: Withdraw from the market once a year
Let’s try something new for our last scenario. The investor in the other two situations would be in the accumulating phase. We may now consider a scenario that represents the retirement period.
If you wish to live off your portfolio, you’ll have to sell some of your holdings. As a result, in our hypothetical investor’s portfolio, he sells for 60’000 CHF per year in order to live off of it. We’ll need various portfolio sizes since custody costs will be a factor in this situation.
Let’s start with an investor who sold a Swiss ETF for 60’000 CHF at the start of the year:
Swiss Brokerage Fees for Swiss ETFs in Retirement
This is where the effect of excessive custody costs may be seen. You have no income in retirement, yet you may be paying your broker thousands of Swiss francs each year! I would not advise anybody to invest with a broker like this! You should look for a broker with the lowest custody charge.
Let’s look at the other four options:
Swiss Brokerage Fees for Swiss ETFs in Retirement
There isn’t much of a difference between the brokers this time. The difference between the lowest and most costly options is 120 CHF each year. It makes no difference.
We may also withdraw money every month to avoid inactivity penalties. This offers the added benefit of allowing you to invest your money for a longer period of time. If the money is taken out every month instead, the outcomes are almost identical:
Swiss Brokerage Fees for Swiss ETFs in Retirement (monthly withdrawal)
Here, the differences are about the same. A difference of 100 CHF each year is not significant. Nonetheless, CornerTrader is the most cost-effective choice once again.
Some believe that selling every quarter is the best way to avoid inactivity fees and high transaction costs. However, this is a pointless optimization. It won’t make a difference in the least. Once a year or once a month, you should retreat. In the long run, investing once a month will provide greater results since you will keep your money in the market for as long as feasible. But, of course, there are other factors to consider.
Finally, instead of selling ETF shares on the Swiss Stock Market, we may sell them on the European stock exchange. Here are the outcomes of our four low-cost Swiss brokers:
Swiss Brokerage Fees for European ETFs in Retirement (yearly withdrawal)
Due to currency conversion costs, the disparity is more substantial this time. FlowBank and CornerTrader outperform the rest by changing currencies twice as cheaply.
In such case, I’d either utilize FlowBank or CornerTrader.
Conclusion
Swiss brokers are costly, but if you look hard enough, you may discover ones that are less expensive than others. If you’re looking for a Swiss broker, I’d suggest Swissquote or FlowBank. They both have reasonable fees. Swissquote is a reputable company. FlowBank is still a very young company, so it may need to establish itself, but it has the potential to be less expensive than Swissquote.
If you want to save even more money on fees, you may use CornerTrader in certain instances. CornerTrader, on the other hand, has a bad reputation, so you’ll have to weigh the dangers against the costs.
In my view, FlowBank and Swissquote are the only two viable options. If I were to employ a Swiss broker, I would go with this option.
Another key takeaway from this essay is that serious investors should avoid brokers that charge a custody fee that is not capped. This soon becomes too costly. As a result, I would advise against utilizing Saxo Bank or Migros Bank. They’re much too costly and will reduce your profits. And there are other Swiss brokers who are much more costly than these two. As a result, Swiss investors should exercise caution.
Do I advise clients to use a Swiss broker now? Not at all. CornerTrader is not inexpensive simply because it is less expensive than other Swiss brokers. All of these brokers are costly and restrict your investment options. As a result, I continue to suggest investing with Interactive Brokers since it is less expensive. Additionally, utilizing a foreign broker allows you to avoid paying stamp duty.
However, if you are concerned about your money leaving Switzerland, it is much preferable to invest via a Swiss broker than to not invest at all! And, since so many of my readers have asked it, I feel compelled to publish this piece. I’m hoping that in the future, there will be more affordable brokers.
You may read their reviews for additional information on the two winners:
If you believe investing costs are trivial, you should read my essay on the effect of investment fees.
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The author of thepoorswiss.com is Mr. The Poor Swiss. He recognized he was slipping into the lifestyle inflation trap in 2017. He made the decision to reduce his expenditures while increasing his income. This blog chronicles his journey and discoveries. In 2019, he plans to save more than half of his salary. He set a goal for himself to achieve financial independence. Here’s where you may send a message to Mr. The Poor Swiss.
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