Medium-term note tips:
- Compare the interest rates of Swiss medium-term notes using the moneyland.ch comparison. You can earn thousands of francs more in interest by choosing the highest-yield notes.
- Medium-term notes are securitized time deposits. Unlike many other kinds of notes, they cannot be sold on exchanges so they are not subject to price fluctuations. In Switzerland, medium-term notes are primarily issued by banks and perform a similar function to bank bonds. Most Swiss banks issue medium-term notes. Some also offer fixed deposit accounts.
- Medium-term notes have fixed interest rates. The annual interest rate remains the same across the entire term.
- Medium-term notes have fixed terms of between 1 and 10 years. As a general rule, the longer the fixed term, the higher the fixed annual interest rate.
- Swiss medium-term notes are typically issued in denominations of 1000 Swiss francs. When this is the case, the minimum possible investment is 1000 francs, and the total amount of investment capital must be a multiple of 1000 francs. There are also banks which issue medium-term notes in 500-franc denominations and some which issue them in 5000-franc denominations.
- Medium-term notes are not classified as segregated assets. In the event of issuer bankruptcy, medium-term note principal is included in the bank’s liquid assets. However, the principal of medium-term notes issued by Swiss banks is protected by the Swiss bank depositor protection scheme. This scheme covers assets in Swiss banks up to a maximum of 100,000 Swiss francs per customer and bank. Important: Medium-term notes issued by non-bank entities (such as those issued by the Coop Depositenkasse) are not covered by depositor protection.
- Medium-term notes with long terms have higher annual interest rates than savings accounts. Another difference is that the annual interest rates of medium-term notes are fixed, while those of savings accounts are variable. However, when you invest in medium-term notes, you cannot withdraw your capital until the end of the pre-agreed investment term. Savings accounts, on the other hand, allow for a certain amount of withdrawals either immediately or on short notice.
- Euro-denominated medium-term notes typically have higher interest rates than Swiss-franc-denominated medium-term notes. However, if your investment capital is Swiss francs and/or you plan to change the principal and interest back into Swiss francs, you bear the risk of exchange rates developing unfavorably.
- Medium-term notes and time deposits are not classified as account balances. This means the full interest earned is subject to withholding tax (Swiss withholding tax: 35%). The waiver of withholding tax for the first 200 francs of interest per annum which applies to private accounts and savings accounts does not apply to medium-term notes.
- Some medium-term notes have fees and charges attached. Because medium-term notes are securities, you may pay custodial fees for safekeeping services. Time deposit accounts may have various account fees. The medium-term note comparison lets you limit results to offers which do not have fees and charges attached.
Swiss fixed deposit and medium-term note comparison
Swiss savings account comparison