The Costs of Online Trading Explained

This guide explains the most important investment costs to consider when choosing a stock broker. Some banks include certain costs – such as the fees charged by stock exchanges – in their brokerage fees. Others charge these fees on top. For you as an investor, the total cost of all fees and charges combined is the deciding factor. You can find the total cost for your trading needs using the interactive stock brokerage account comparison on moneyland.ch.

Custody fees

Banks charge custody fees for holding and managing your securities (like stocks and bonds) in a custody account. In Switzerland, you pay value-added tax (VAT) on top of custody fees. Most Swiss banks charge custody fees.

Custody fees can vary depending on a security’s type, value, and domicile, or how many units of a security you hold. Typically, custody fees are charged as a percentage (between 0.1 and 0.5 percent per year, for example). Depending on how valuable your investments are and which bank you use, custody fees can cost as much as hundreds or even thousands of francs per year. Some banks charge a minimum custody fee regardless of your account balance (25 francs per quarter, for example).   

Some banks, like Bank Cler, charge a fee for each different stock or other security you hold (10 francs per year, for example). There are also Swiss banks that charge higher custody fees for securities that are held in foreign repositories.

The stock brokerage comparison on moneyland.ch makes it easy to find the exact custody fees across banks, types of securities, and amounts.

Stock brokerage fees

Stock brokerage fees are fees charged by your bank when you buy or sell an asset. Stock brokerage fees can vary substantially depending on the value, category, and domicile of the securities being traded. Some banks have a minimum and/or a maximum brokerage fee per transaction. Some banks include the cost of stock exchange fees in their brokerage fees, while others charge stock exchange fees separately.

Typically, Swiss banks charge a brokerage fee equal to between 0.1 and 2 percent of the transaction’s value, depending on the bank and the type of security. For large trades in particular, brokerage fees can present a very substantial expense that can be as high as several thousand francs per trade. Some banks charge a flat fee per trade, regardless of the size of the transaction. Some banks charge lower brokerage fees when you place orders over their online platform instead of over the phone. In every case, it is important to compare the costs carefully before you decide which Swiss banks to use for investing. The stock brokerage account comparison on moneyland.ch makes comparing easy.

Swiss federal stamp duties

The federal stamp duty is a tax that is levied by the Swiss federal government every time a security is bought or sold. The stamp duty is 0.075 percent of the amount being transacted for Swiss securities, and 0.15 percent for foreign securities. All Swiss banks charge the federal stamp duty to customers on top of their brokerage fees.

Stock exchange fees

Stock exchanges charge banks fees for trades made on the exchange, and some banks pass these fees on to you as the customer. Stock exchange fees are generally low, especially compared to the cost of the Swiss federal stamp duty. Some more specialized exchanges charge higher fees. You can learn more in the moneyland.ch guide to stock exchange fees.

Basic account fees

Some Swiss banks charge basic, ongoing account fees in addition to custody fees. These account fees are listed separately in the cost breakdowns found in the moneyland.ch stock brokerage account comparison.

Foreign currency exchange costs

Buying and selling securities in foreign currencies generates foreign currency exchange costs – primarily in the form of unfavorable currency exchange rates. Depending on the exchange rates used by your bank, the cost of exchanging currencies can be substantial.

Fees for tax statements

Many Swiss banks charge an additional fee for detailed tax statements. This fee is typically around 100 francs, but some banks charge as much as 500 francs for a detailed tax statement.

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