Custodial fees are fees which a bank charges customers for the safekeeping of their securities. If you make use of certain brokerage or wealth management services, for example, depositing securities in a custodial account may be necessary.
Major cost differences between custodian banks
The costs of securities transactions can be high, depending on the custodian bank you work with. It is a good idea to compare all possible fees before settling on a bank.
The interactive broker comparison on moneyland.ch lets you easily compare both trading fees and custodial fees. Just select “Individual profile” and enter the amounts of securities which you expect to place in custody under the “Securities in custody” section. Comparison results account for the 8% valued added tax to custodial fees.
Fees vary depending on the type of securities
Some custodians charge different custodial fees for different types of securities. For example, banks may charge lower fees for the custody of medium term notes or for their own investment products.
Some custodians also differentiate between securities held locally and those held abroad. In this case higher fees are normally charged for securities deposited outside of Switzerland. Customers residing abroad ma also pay non-resident account fees.
Save thousands of francs on fees
Larger securities deposits can easily cost thousands of francs per year in custodial fees. UBS, for example, charges 0.35 percent in fees for deposits of up to 10 million francs, and 0.55 percent for securities deposited abroad.
Credit Suisse charges 0.35% (local deposits) or 0.5% (foreign deposits) for up to 5 million francs of securities, with additional minimal fees of five francs per month per position.
The Zürcher Kantonalbank charges monthly custodial fees of 0.3% (local, minimum 3 francs) or 0.4% (abroad, minimum 4 francs) per position.
It is worth noting that online brokers charge lower fees than major banks do.
Custodial fees at Swiss online broker Strateo are just 0.02% (minimum fee of 15 francs and maximum fee of 35 francs per quarter.
A fee of 100 francs every six months is charged by Saxo Bank, but only if no trades have been made during that time. Saxo Bank charges an additional monthly deposit fee of 0.12% (5-francs minimum) for deposited shares, ETFs and bonds.
Swissquote charges 0.025% per quarter, with a 15-franc minimum quarterly fee and a 50-franc maximum quarterly fee.
Other trading platforms like those provided by Cornèr Trader do not charge any custodial fees.
From 2017, PostFinance is charging 90 francs for securities administration. Up until 2016, custodian accounts were free of charge. However, the 90-franc custodial fee serves as a credit which can be applied towards transaction fees.
Transfer fees compared
Switching custodian banks is not difficult in Switzerland, but it typically comes with high costs. Transfer costs are usually between 50 and 100 francs, though they can be as high as 200 francs. That seems like even more when you understand that this fee is charged per security, rather than per account. The goal of the high fees is to remove the incentive for a move to another bank.
Some cantonal banks charge 50 francs per transfer for Swiss securities. These include the cantonal banks of Geneva, Schaffhausen, Basel Land and Thurgau.
Some other banks, including UBS, Migros Bank, Bank Coop, PostFinance, Valiant and the cantonal banks of Glarus, Lucerne, Nidwalden, Zug, Bern and Zurich, charge 100 francs per security.
Some banks charge higher fees to transfer foreign securities. The Berner Kantonalbank charges 125 francs per foreign security transferred. Bank Coop, PostFinance, Banque Cantonale Vaudoise and the Graubündner Kantonalbank charge 150 francs.
One option for those looking to change custodians without paying high transfer fees is to sell the securities ahead of the switch. If selling securities is not an option, it is worth knowing that some banks will cover at least part of the cost of transfers when you open your new account with them.
An example of a bank that offers this welcome benefit is TradeDirect (Banque Cantonale Vaudoise). Once you have settled on the custodian bank to go with, ask them if they provide a welcome offer to cover transfer fees.
The moneyland.ch team