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COST OF LIVING

Which bank is best for Americans in Switzerland? 

Americans in Switzerland face additional hurdles when banking in Switzerland. Here's what you need to know.

A person pays with a card. Card payments are still relatively uncommon in Switzerland
What banks are best for Americans in Switzerland - and which ones should they avoid? Local readers weigh in. Photo by energepic.com from Pexels

As we reported in our previous article on the topic, regulations put in place by the United States has made banking difficult for those located abroad, including in Switzerland.

The situation is particularly precarious for Americans, with many banks refusing to open accounts for US citizens.

To get the lowdown on where to keep your money as a foreigner living in Switzerland, we asked our readers for their inside tips.

Here’s what you need to know.

Not American? Then check out the following link. 

EXPLAINED: Which banks are best for foreigners in Switzerland?

What banks are available in Switzerland?

While there are a myriad of financial service options available in Switzerland, the Swiss banking sector is divided into three loose categories: big banks, cantonal banks and the new players.

The big banks are the major retail banks in Switzerland. This includes UBS, Raiffeisen, Credit Suisse, Migros Bank and PostFinance.

The cantonal banks are, as the name might suggest, banks that are in particular cantons. There are 24 cantonal banks in Switzerland (i.e. in all cantons except Solothurn and Appenzell Ausserrhoden).

Cantonal banks are only open to residents of those cantons.

The new players include ‘neobanks’ like Neon, CSX (subsidiary of Credit Suisse) and Yapeal, among others, along with more traditional newer banks like Valiant.

What are the rules for Americans banking in Switzerland?

The most important among them is the Foreign Account Tax Compliance Act (FATCA), which was passed by Congress in 2010 and went into effect on January 1st, 2014. It requires foreign banks to report to US tax authorities (IRS) all the assets that belong to US citizens – whether living in America or abroad.

The question of which Swiss bank is best for Americans is one we’ve been asked before by readers, although the experience people have tends to differ dramatically.

Some readers have told us it was almost impossible.

“I’ve been ‘bank shopping’ here since I arrived eight months ago, but nobody wants to open an account for me once they find out I am American”, Terry, who is married to a French citizen and lives in the suburbs of Geneva, told The Local.

One reader, Sue*, got in touch with us to say that she eventually renounced her US citizenship in order to be able to have banking freedom in Switzerland.

READ MORE: Why are Americans being turned away from Swiss banks?

Prior to that, she had “no financial independence” and was forced to rely on her husband.

“I was Swiss but had no rights, because I was also an American, to hold my own bank account without depositing very large amounts to purportedly justify the additional work by the bank to do all the necessary reporting to the U.S,” Sue said.

Sue said she was told she needed to deposit “a six figure sum” in order to have the account opened – and eventually decided to give up her US citizenship.

Another reader, Georges, who was born in Switzerland, did the same.

Other readers however have said that while it isn’t easy, Americans need to shop around to find the right account.

Sofia, in Geneva, said the problems for Americans getting an account were “not nearly as drastic as the article portrayed (speaking as an American living in Switzerland (since) 2011)”.

A wall of open safety deposit boxes

Opening up a bank account in Switzerland can be incredibly complicated. Photo by Jason Pofahl on Unsplash

Which bank is best for Americans in Switzerland?

One which ranked highly was Swiss online bank Neon, which is one of the wave of neobanks which have grown in popularity recently.

READ MORE: How to open a bank account in Switzerland

Neobanks offer many of the services of a regular bank – including an IBAN for transactions, credit or debit cards and online payment options – but there are no branches or locations.

Their fees also tend to be much lower than traditional banks. Mikołaj, from Zurich, said Neon came out on top as it was “completely free” with “service in English”.

Shahram, from Zug, told us that Neon was the best option for people “who want to save money and only need online banking”.

Another bank which several of our readers recommended was UBS.

Steve recommended the UBS Family Account for its visa debit and Apple Pay links, as well as the functionality of its app.

Sofia, in Geneva, also recommended UBS.

Shahram said UBS was particularly good for foreigners as their “transfer rates to move money abroad tend to be more competitive”.

“It has a good network in Switzerland and abroad”.

Bob recommended Credit Suisse, saying it was “modern, English was spoken by all bankers and (it has) very good e-banking”.

Simon, from Chur, was the only reader to recommend a cantonal bank. After looking around, he eventually went with the Graubundner Kantonalbank.

“I looked at several, UBS and Post Office, but the most friendly and accessible were the Kantonalbank. We were immediately assigned a manager, and he was super helpful. More so than UBS and Post Office,” he said.

“Of course you must be present to open the account. The fees are also reasonable.”

Simon also told us that the internet banking portal was good “better than HSBC in the UK”.

Which banks will open an account for Americans in Switzerland? 

Several other American readers also told us UBS was the best option for Americans in Switzerland. While the fees were high, they would offer to open an account without a minimum deposit. 

Sofia told us there was just more paperwork for Americans.

“UBS does still have American clients (you have to visit in person at the main branch in your city and sign documents about FATCA compliance), Post Finance will also open accounts, and so do some of the cantonal banks. It’s far from impossible,” she said.

A UBS banking logo on an overhead walkway in Switzerland

Local readers were polarised by UBS, with some recommending it and others saying it was not worth it. Opening up a bank account in Switzerland can be incredibly complicated. Here’s what you need to know. Photo by Jason Pofahl on Unsplash

Bob told us that Credit Suisse would open accounts for Americans, provided you waive the right to bank privacy in order with IRS regulations.

“(Credit Suisse are) pretty good at getting the annual form sent to the US IRS right. Just waive the bank privacy, fill out a US W-9, and no problem being a US citizen if you have a CH residency permit. Private bankers are very responsive.”

Eric, from Lausanne, pointed to UBS’ special accounts for Americans as a reason to sign up.

“UBS – (has a) separate bank for Americans and also one of the only ones (to offer banking to Americans),” he said .

“They are expensive like every bank but do not have minimum requirements like some of the other banks. Also, if you have a partner that is not American they have to have a separate account for you”

Travel: Six ways to save money while visiting Switzerland

Jeremy also told us that he was able to open an account with UBS once he received his Swiss residency documentation.

“I am an American and moved to Switzerland recently.  I did not have a problem opening an account once I received my B-permit.  This said, the FACTA requirements are an annoyance, requiring additional paperwork.”

Nick, an American who lives in Bern, however said he was turned down by UBS – along with Credit Suisse – who told him he would need to wait for over a year before he could open up an account.

“Local banks won’t touch Americans due to (American) regulations,” he said.

He went with Valiant because it was the “Only bank that would open an account for me.”

Which bank should foreigners avoid in Switzerland?

If you want to avoid paying high fees, several readers told us to avoid the big banks like UBS and Credit Suisse.

Mikołaj said to avoid UBS as it was “absurdly expensive”.

One American reader, Jeremy*, told us UBS told him he needed to deposit a minimum of CHF2 million in order for the bank to waive its high fees – an amount that he did not have.

“All the banks charge annual fees and provide no interest to konto (account) holders. Yet, these very same banks report astonishing profits year-after-year.  There are no credit unions.  The people that appear to profit are the people that are already rich. Us average blokes cannot get ahead.”

Whether English was spoken is another factor. Although most Swiss banks have English portals on their websites, readers told us there are often problems communicating with banks in English.

Steve told us this was a problem at cantonal banks.

“If you don’t speak German then the smaller cantonal banks can be a pain but they are getting better”.

Shahram also said cantonal banks “were limited” and may not be ideal for foreigners.

Simon said foreigners may face issues with cantonal banks as the banking apps only work on Swiss mobile phones.

*Persons appearing with an asterisk had their names changed at their own request.

This report has been put together as a guide only and The Local has not received any juicy kickbacks from these banks, nor do we endorse one organisation over the other. 

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For members

QUALITY OF LIFE

ANALYSIS: Is the quality of life really that high in Switzerland?

Switzerland, as well as some of its cities, regularly appear in international surveys among the nations with the highest quality of life. Why is this so?

ANALYSIS: Is the quality of life really that high in Switzerland?

In its annual ranking of 85 nations, US News & World Report has placed Switzerland in top position, based on 73 different criteria.

While it did not come up tops in all of the categories, Switzerland did sufficiently well in others to get an overall high score, as well as high scores in several individual categories.

In terms of quality of life, Switzerland ranks fourth, but it got high scores across nearly all the sub-categories. This is where the country ranks best — and not so good.

READ MORE: Switzerland ranked ‘best country’ in the world

Political stability (100 points out of 100)

Nobody can argue that Switzerland merits to get such high marks in this category.

The country has not been involved in any wars, unrests or upheavals in recent history, protected in large part by its neutrality and pacifism.

It is also politically stable from within, with well established democratic processes — such as referendums — providing security against abuses of power.

Economically stable  (100)

Switzerland’s economy has withstood the Covid crisis far better than many other countries, and continues to be strong, partly due to an inflation rate that is far lower than in eurozone nations.

The reason is that Switzerland “combines world class governance with high levels of social capital and high social resilience. It also had strong financial systems, manageable debt levels and good health system resilience”. 

READ MORE: Swiss post-Covid economic recovery ‘fourth best in the world’

Safety

Various surveys have shown that Switzerland is among the top-10 safest countries in the world, and one even rated it the safest in 2022.

This is not to say that there is no crime in Switzerland, but the rate, especially of violent infractions, is relatively low in comparison to other countries.

Even large cities, though more risky than small towns and rural areas, are not crime-ridden.

READ MORE: Switzerland ranked one of the world’s ‘safest countries’

A good job market (92.2)

Switzerland’s unemployment rate has been lower than in many other countries for decades, and it recovered quicker than others from the slowdown that occurred during the pandemic.

Currently, the unemployment is 2.1 percent, versus 6.6 percent across the EU.

There are now 15.6 percent more job vacancies in most industries than at the same time in 2021.

Family-friendly (85.4)

Parents of small children who are trying to find affordable daycare in Switzerland may disagree with this assessment, as these services are expensive and good facilities may be hard to find.

However, there are plenty plenty of benefits for children and families as well.

According to The Local’s reader survey, Switzerland offers an abundance of outdoor activities, the children are safe — whether playing outside or walking to school — and both good healthcare and education system are a plus as well.

Income equality (85.2)

In this category, Switzerland is in the 5th place in the US News & World Report survey, right after the Scandinavian countries.

While there is data showing that  gender gap exists when it comes to pay, a study by the Federal Statistical Office shows that income distribution (between the highest and lowest earners) is fairer in Switzerland than in many other nations.

Public health system (84.7)

Although very expensive with costs increasing each year, in terms of quality and access to care Switzerland’s system is among the best in the world.

Like much of the European Union, Switzerland has a universal health system. However, The system here is fundamentally different in that it is not tax-based or financed by employers, but rather by individuals themselves.

Everyone must have a basic health insurance coverage and purchase it from one of dozens of private carriers.

The system is generally efficient, has an extensive network of doctors, as well as well-equipped hospitals and clinics.

Patients are free to choose their own doctor and usually have unlimited access to specialists. Waiting lists for medical treatments are relatively short.

READ MORE: How is Swiss healthcare system different from the rest of Europe?

Public education system

Switzerland has 12 publicly funded universities (10 cantonal universities and two federal institutes of technology), and a number of public Universities of Applied Sciences.

According to The QS World University Rankings, “Switzerland has the “third best university system in the world”.

The country also excels in vocational training —a three-year, dual-track programme that includes two days in a vocational school and three days getting an on-the-job training in their chosen sector (the so-called apprenticeships).

It includes a variety of fields such as business and commercial, administration, retail, tourism, construction, information technology, arts, wellness services, as well as various trades — in all, 230 professions.

This programme  “enjoys very strong support from Swiss employers, who credit it with being a major contributor to the continuing vitality and strength of the Swiss economy”

READ MORE: Why is vocational training so popular in Switzerland and how much can I earn?

These aspects all contribute to the high score Switzerland obtained for its quality of living.

Not great for affordability

However, there is one negative category in the ranking as well, and it is not difficult to guess what it is: affordability, in which Switzerland’s score is…2.7.

It comes as no surprise to anyone living here (and a shock to tourists and new arrivals) that Switzerland’s cost of living is among the highest in the world, and especially in the country’s two largest cities, Zurich and Geneva.

Everything from food and clothing to housing and public transportation is more expensive than in the EU, with the exception of electronics and lower taxes.

However, there is also another way to look at this phenomenon: that Swiss salaries, which are higher here than in the eurozone, and low inflation rate, offset the prices.

READ MORE: Do wages in Switzerland make up for the high cost of living?
 
 
 

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