Banking transactions

Is it worth changing to a more cost-effective bank?

Banking customers with a securities account need to make sure that the fees don’t eat away at their returns. Many banks charge excessive custody and brokerage fees, so if you trade securities, you should switch to a more cost-effective bank. Despite the high transfer costs of changing banks, this still often pays off within the first year. 

VZ fee models

Why is it problematic if a bank recommends one of their own funds to me?

Banks earn more from their own products than they do from third-party products. Therefore, securities accounts frequently contain a large amount of banks’ own investment funds. It is often the case, however, that these funds are only average and perform far worse than the best funds in the same category. Independent investment advisors and asset managers such as VZ are not bound by any banks and their corresponding investment policies that are weighted more towards their own interests than those of their customers. They only recommend products which perform well in an objective selection process and are the most cost-effective in their category. 

Nowadays do I lose money with a savings account?

More and more banks are starting to charge negative interest on savings. But even without negative interest rates, savings accounts are nowadays a loss-making business once inflation and taxes are taken into account. Traditional fund savings plans mainly benefit banks as the fees charged are extremely high. Nowadays it makes more sense to make regular payments into an ETF savings plan. 

What is better: An ETF savings plan or a fund savings plan?

As a rule, fund savings plans are very expensive. If you actually take into account all the costs, it is often the case that two percent or more of the returns goes on fees – every year. ETF savings plans are significantly cheaper. As a rule, they charge less than one percent fees on net returns. You should also consider that fund savings plans mostly contain actively managed investment funds, the vast majority of which fail to consistently outperform their index. By contrast, ETFs replicate a given index, which not only costs less, but is often also more successful. 

Why is worth having an independent securities portfolio check?

An independent securities portfolio check will identify any weaknesses in your securities accounts as well as any clear conflicts of interest for banks. Many accounts, for example, contain too many of a bank’s own funds and structured products. Experience shows that this has a negative impact on returns. Get a securities portfolio check now and find out how well your securities accounts are performing compared to the market and other investors.

How can I securely trade and store cryptocurrencies?

Bitcoin, Ether and other cryptocurrencies can be exchanged on crypto-exchanges for traditional currencies. Some crypto-exchanges also offer custody services for this sort of digital asset. However, there have been numerous cases of these exchanges being attacked and substantial amounts being stolen. Furthermore, crypto-exchanges are only partially regulated by supervisory authorities at present. 

VZ Depository Bank provides you with direct, straightforward access to trade selected cryptocurrencies and store them securely in line with the standards stipulated by banking supervisory regulations. Find out more here.

Is it at all worth paying into a third pillar?

Balances in 3a accounts barely post any growth because interest rates are practically zero, and therefore there is no compound interest effect. This is unlikely to change in the near future. That is why a cost-effective 3a solution with securities is a better option. While they involve more risk over the short term, it is very likely that over the long term they will generate far higher returns than a 3a account. 

Vested benefits account: How can I grow my cash holdings even without interest?

Pensions from the second pillar are constantly decreasing. That is why working people today are more reliant than ever on their pension balances growing despite low interest rates. People investing their money in securities often have tens of thousands of francs more to live off in their old age. In a low-interest-rate environment, a vested benefits account only makes sense if you cannot accept any fluctuations in value – or if you only want to park your money for a short time. 

Who do retrocessions belong to?

The Federal Supreme Court has ruled on numerous occasions that retrocessions belong to customers. Nevertheless, investors at many banks have to waive their rights to these commissions which the bank takes when they broker financial products. This is not only unfair, but can also lead to conflicts of interest. Banks then have a real incentive to recommend products for which they receive the highest commission. At VZ Depository Bank, all retrocessions are returned to investors – which is not the case at many other banks even if they manage their securities accounts themselves. 

Mortgages: Is there a conflict of interest for my bank?

Many banks’ core business activities include the interest margin business. This means that banks invest their customers’ short-term deposits over the long term, for example in fixed-rate mortgages. Because the money in these mortgages is tied up for a far longer period of time, banks can demand a higher interest rate than the rate they pay on savers’ deposits. That is why many recommend medium- to long-term fixed-rate mortgages despite there being more cost-effective models available to customers.