PostFinance is expanding its negative interest rates. This report explains which customers are affected, how high the charges are, and when the negative interest rates will begin to apply.
Which PostFinance customers will pay negative interest?
PostFinance account holders whose account balances exceed 100,000 francs will be charged negative interest on the balance exceeding that threshold. PostFinance raises this threshold for customers who make use of its investment solutions. The thresholds applicable to investment customers are shown in the table below.
| Value of investments with PostFinance |
Threshold for negative interest rates |
| 0 to 24,999.99 francs |
100,000 francs |
| 25,000 to 49'999.99 francs |
150,000 francs |
| 50,000 to 74'999.99 francs |
175,000 francs |
| 75,000 to 99'999.99 francs |
200,000 francs |
| 100,000 to 249'999.99 francs |
350,000 francs |
| 250,000 to 499'999.99 francs |
600,000 francs |
| 500,000 to 749'999.99 francs |
850,000 francs |
| 750,000 to 999'999.99 francs |
1,100,000 francs |
| 1'000,000 francs or more |
2,600,000 francs |
For private customers who have PostFinance mortgages worth 100,000 francs or more, the threshold is raised by an additional 250,000 francs.
PostFinance continues to refer to negative interest rates as customer asset fees – likely to disassociate itself from the term negative interest. But while it may use a different term, the customer asset fees are negative interest rates, like the negative interest rates used by some other Swiss banks.
Which PostFinance accounts are affected?
The negative interest rates apply to PostFinance private accounts and savings accounts in Swiss francs and euros. Accounts in other currencies are not affected, nor are capital payment accounts, deposit accounts, 3a retirement accounts, vested benefits accounts, fixed deposits and call deposits.
The threshold applies on a per-customer-relationship basis rather than per account. For example, if you and your spouse have a joint customer relationship for a mortgage, that mortgage does not count towards non-joint accounts for which you have individual customer relationships. The table below clarifies this point.
| |
Customer relationship
Mrs. Jones |
Joint customer relationship
Mr. and Mrs. Jones |
Customer relationship
Mr. Jones |
| Mortgage size |
0 francs |
480'000 francs |
0 francs |
| Value of investments |
80'000 francs |
0 francs |
0 francs |
| Threshold |
200'000 francs |
350'000 francs |
100'000 francs |
How high are the charges?
The interest rate is -0.75 percent. The charge is calculated daily and deducted at the end of the following month. If, for example, you had 200,000 francs in PostFinance accounts and do not use PostFinance investment products, your account balance would exceed the threshold by 100,000 francs. In this case, you would be charged 62 francs in negative interest every month.
From when will the new thresholds apply?
The new terms and conditions will apply from July 1, 2021. From that date, holding life insurance from PostFinance also will no longer be credited towards negative interest thresholds. Assets which count towards raising the threshold for negative interest from that date include investments in PostFinance funds, pillar 3a retirement funds, vested benefits funds, E-trading, E-asset management, and investment consulting Plus.
Why is PostFinance expanding negative interest rates?
PostFinance already lowered its negative interest threshold for private customers from 500,000 to 250,000 francs a year ago. The Swiss National Bank (SNB) has not lowered its interest rates since then, but PostFinance is still expanding negative interest rates. The bank says that the move is a further response to the ongoing situation. PostFinance spokesperson Johannes Möri told moneyland.ch that PostFinance’s investment portfolio still includes high-interest bonds which can no longer be profitably reinvested in financial markets. The ongoing negative interest environment means PostFinance is earning less and less every year.
How can I avoid negative interest charges?
“You can transfer part of your money to a different bank in order to bring your PostFinance account balances under the threshold,” says moneyland.ch CEO Benjamin Manz. There is a chance that PostFinance and other banks will lower their thresholds even further in the future.
The savings account comparison on moneyland.ch makes it easy to find the banks to divide your assets between for maximum interest earnings. The comparison accounts for negative interest rates as well. You can find an overview of Swiss banks which charge negative interest and their thresholds here.
Should I invest my money instead of holding it?
You can invest part of your wealth in funds or other securities with PostFinance. This will raise your threshold accordingly. Getting a PostFinance mortgage raises the threshold by another 250,000 francs. However, moneyland.ch does not recommend investing with PostFinance just to avoid paying negative interest.
Actively-managed mutual funds in particular can be expensive. Customers should take care and compare the exact terms and conditions. Also note that investing often caries a high risk of loss compared to holding savings account balances.
More on this topic:
Swiss banks with negative interest rates compared
Savings account comparison
Online trading comparison
