euro account switzerland

Euro Accounts: Are They Worth It?

Can a Euro bank account pay off for Swiss residents? This moneyland.ch report answers that question.

Since the lifting of the euro/CHF exchange floor by the SNB, many Swiss have tried to profit from the weak Euro. This is the reason why long lines could be found at most ATMs following the Swiss National Banks’s unexpected announcement.

Others flirted with the idea of opening a euro account. There is a chance that the Euro will strengthen against the Swiss franc. If the euro does go up, those who purchase euros at current reasonable rates could profit by charging purchases to their euro account or exchanging their euros for Swiss francs at a later date.

Compared to stocking euros in cash, a euro account has the benefit (in theory) of delivering yields on your assets. There are two main types of euro accounts. Both are just as easy to open as regular Swiss franc-based bank accounts.

Euro checking account

The first option is a checking account, commonly called a private account or giro account in Switzerland. Checking accounts are designed to handle frequent financial transactions. Your debit card, from Maestro for example, will typically be linked to this type of account.

The downside is that euro checking accounts in Switzerland offer very little in the way of yields, as comparisons show. Some, including euro checking accounts from UBS, don’t provide any interest at all. Instead, you will normally pay fees when you use your checking account.

Euro savings account

Another option is a savings account, which most banks provide free of charge. A savings account will not work well for all your regular transactions, but it does normally have a higher annual percentage yield rate. Withdrawal regulations are usually tighter than those of checking accounts, and if you plan to withdraw large sums you may need to provide advanced notice.

As shown by the interactive euro savings account comparison from moneyland.ch, there has been a dramatic drop in annual yield rates for Swiss euro accounts, with yields following the low rates of Swiss franc savings accounts. Because of this, the benefits of holding euros in a savings account rather than cash are few.

Speculators should also consider that, in the absence of a fixed floor on exchange rates, the euro could theoretically depreciate in value against the Swiss franc.

Euro accounts for regular euro transactions

There is one use case in which a euro account can benefit you, which has nothing to do with speculation. Opening a euro account is a good idea if you regularly pay for goods and services in euros.

When you use a Swiss franc account to pay in euro-zone countries, the foreign currency exchange fees will vary depending on the payment processors involved. Because you can pay directly in euros from your euro account, you avoid the currency exchange fee. Just note that unless you receive a part of your income in euros, you will have to account for the currency exchange fees when you deposit Swiss francs into your euro account. The benefit is that you always pay the exchange fee charged by your bank, rather than subjecting yourself to nasty foreign transaction fee surprises every time you pay in euros.

This is especially true for credit cards. When you pay with credit cards powered by Swiss francs, you may be charged foreign transaction fees totaling up to 4% of the transaction amount. So you can avoid wasting money on fees by using a euro credit card to make euro payments.

More information:
Savings accounts compared
Private accounts compared
Credit cards compared

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The moneyland.ch magazine provides accurate, unbiased information on topics related to finance and money. In addition to research and expert interviews, the magazine contains numerous financial guides.