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I noticed that some banks, like Credit Suisse, pay out high interest on savings when you get certain package deals with various bank accounts inclduded. Does the higher interest make these package deals a good choice for savers?
Hi there,
Whether or not getting a bank package is beneficial from an interest-earning perspective depends on how much money you expect to deposit and whether or not you need the additional services included in the package.
Example: The savings account you get with the Bonviva Platinum package from Credit Suisse currently pays out 0.5% interest on up to CHF 500,000 of savings (0.1% for savings in excess of that amount) - much more than the 0.01% on up to CHF 250,000 that applies to standard Credit Suisse savings accounts - but the cost of the package is CHF 960 per year.
If you hold CHF 500,000 in the Platinum savings account, the CHF 2500 you earn in interest each year trumps the CHF 25 which you earn with the standard savings account by far, even after deducting the significant annual fee (CHF 2500 interest - CHF 960 annual fee = CHF 1540 profit). However, you would need to hold CHF 192,000 in the Bonviva Platinum savings account just to earn enough interest to cover the package fee.
In addition to a savings account, bank packages typically include at least one private account and at least one credit card. The Bonviva Platinum package, for example, comes with the Bonviva Platinum American Express credit card which entitles you to unlimited, complimentary airport lounge visits and a concierge service. Some packages include multiple private accounts and even one or more current accounts.
If you need the services included and would pay for them anyway, you can often get better value by getting them as a bundled package. You can use the unbiased moneyland.ch banking package comparison to find the savings interest rates and the total costs of package deals from Swiss banks.
In most cases, opening a free savings account as a stand-alone product is more profitable from a strictly interest-earning perspective as long as you choose an account with a good interest rate. You can compare the interest rates of Swiss savings accounts using the interactive savings account comparison on moneyland.ch.
Best regards from Moneyguru
