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What are Swiss cantonal banks and does it make sense to open accounts there?

Helena Bachmann
Helena Bachmann - [email protected]
What are Swiss cantonal banks and does it make sense to open accounts there?
Basel Cantonal Bank is one of 24 in Switzerland. Photo by Fabrice COFFRINI / AFP

After the recent collapse of Credit Suisse and its takeover by UBS, many people are wondering whether there is an alternative in Switzerland to the huge national banks. There are, in fact, some options for you to consider.

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For a tiny country, Switzerland sure has a lot of banks — 243 in all, although now that Credit Suisse is out of the picture, there is one less.

They include the so-called ‘major national banks’ — UBS, Postfinance, and Migros.

There are also 24 cantonal banks, 29 regional  banks — serving limited geographic regions within Switzerland — and a cooperative bank like Raiffeisen.

There is also a number of private financial institutions.

This government link is a good guide to all of Switzerland’s banks.

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What are cantonal banks and how do they differ from national ones?

There are currently 24 cantonal banks, one in each canton apart from Appenzell Ausserrhoden and Solothurn.

As the name suggests, these banks are owned by the canton in which they are located — in the very least, cantonal authorities hold significant financial stakes in these institutions. 

You may be wondering, given the recent events, whether cantonal banks are safer that  the national institutions?

Assets deposited in any recognised bank in Switzerland, regardless of the type, must be licensed, regulated, and supervised  by the Swiss Financial Market Supervisory Authority FINMA.

This means all banks operating in Switzerland must have enough money to cover deposits of up to 100, 000 francs.

As an additional protection against losses, all financial institutions in the country must be members of the deposit insurance scheme, esisuisse, which takes effect in case a bank becomes insolvent.

READ MORE: How safe is your money in a Swiss bank? 

Relating specifically to cantonal institutions, “many cantonal governments fully guarantee the account balances of their corresponding cantonal banks,” according to Moneyland consumer platform. 

“This sets cantonal banks apart from other banks whose clients are only protected up to the limits applicable to the depositor protection scheme managed by Esisuisse."

All but three cantonal banks — Berner Kantonalbank (BEKB), Banque Cantonale Vaudoise (BCV), and Banque Cantonale de Genève(BCGE) — benefit from this comprehensive protection.

The three banks that don’t are still insured by the esisuisse insurance scheme.

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Should you move your money to a cantonal bank?

There is no clear-cut answer to this question.

According to Swiss media reports, “Credit Suisse lost a huge number of customers since even before its collapse, due to massive losses." 

A recent survey carried out by the  Lucerne University of Applied Sciences shows that cantonal banks "succeed better than most competitors" in attracting clients.

"Customer proximity in their home markets pays off for the entire group of cantonal banks," the survey indicated.

If you want to put your money into your cantonal institution, the process to open an account is pretty much the same as in any other  bank.

 READ MORE: How to open a bank account in Switzerland

They offer most of the same services — such as savings, mortgages and investments — as national banks.

Keep in mind, however, that they provide services only to the residents of the Swiss canton they operate in, which, of course, is not the case with national banks.

By the same token, if you ever move to another canton, you will have to relocate your accounts as well, though you can withdraw your money from any ATM anywhere in Switzerland, regardless of whether it’s your cantonal bank, another one, or a national branch.

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