In effort to curb weaker growth, inflation prospects abroad and reign in appreciation of the Swiss franc, the Swiss National Bank (SNB) has imposed higher interest rate to financial institutions under the negative interest rate policy.
Officials led by SNB President Thomas Jordan responded, saying the low-rate environment around the world has “become more entrenched and could persist for some time yet”. They will exempt 25 times minimum reserves from November 1, up from 20 currently. This would be subjected to monthly review. Currently, SNB policy rate is at -0.75% which will aims to reduce the central bank’s negative interest income.
While other Switzerland banks such as UBS and private bank Julius Baer have reported to introduce the cost of negative official rates to affluent depositors, Credit Suisse, Switzerland’s second biggest lender is passing on the additional cost to wealthy clients too.
The bank announced that an interest rate of 0.75% will be charged to private clients and corporate clients with cash holdings deposits of above CHF2m ($2.02m) while corporate clients with holdings more than CHF10m will be charged 0.85% annually. Clients with cash holdings of less than CHF2m will not be affected.
These charges will be effective on 15 November 2019 and 1 January 2020 for corporate clients and private clients respectively.
Original article: Credit Suisse to start charging wealthy clients for cash deposits