The Swiss Banking Act of 1934 made it criminal for Swiss banks todisclose the name of an account holder. Similar to the confidentiality protections between doctors and patients or lawyers and their clients, these protections are the primary reason that Swiss bank accounts are so popular with wealthy banking customers around the world.
Key Takeaways
- Swiss banks employ a strict level of scrutiny in evaluating official documentation of your identity.
- Nonresidents of Switzerland must be at least 18 years old to open a Swiss bank account, and that's about the only restriction.
- The main benefits of Swiss bank accounts include low levels of financial risk and high levels of privacy.
- Swiss law prevents the bank from disclosing any information regarding an account (even its existence) without the depositor's permission, except in cases where severe criminal activity is suspected.
Opening a Swiss Bank Account
Surprisingly, opening a Swiss bank account is not that much different from opening a standard bank account. You have to fill out forms and provide documentation that proves who you are and what you do. However, due to some special circ*mstances regarding privacy, the level of scrutiny over providing official documentation of your identity is more strict. For example, you may need to show your official passport to provide your identity, whereas a driver's license would probably suffice in the U.S.
There are also different minimum balance requirements depending on the type of account you want. These can range from a few thousand dollars to millions of dollars.
Swiss Bank Accounts and Nonresidents of Switzerland
Nonresidents of Switzerland must be at least 18 years old to open a Swiss bank account, and that's about the only restriction. Account holders can choose their currency—most hold their funds in Swiss francs, U.S. dollars,euros,or British Pound Sterling.
There's usually no minimum balance required to open an account, but once an account holder deposits funds, there is typically a minimum balance requirement, which varies according to the bank. If you don't have that much idle cash, you might be better off looking for the best savings accounts in your own country.
Swiss anti-money-laundering laws require a prospective Swiss bank account holder to provide several documents to open an account. These include authenticated copies of your passport and documents explaining your profession, such as tax returns, company documents, professional licenses, etc.; proof of the source of your funds; and other typical personal information.
$3.9 trillion
The total value of all assets in the Swiss banking sector, as of 2021. That's 520% of Switzerland's GDP.
Benefits of Swiss Bank Accounts
Some benefits of Swiss bank accounts are the low levels of financial risk and high levels of privacy. The Swiss economy has been known to be very stable, and the country has not been part of any major conflicts for some time. Furthermore, Swiss law requires that banks have high capital requirements and strong depositor protection, which protects deposits from financial crises and conflicts.
Accounts held in Swiss Francs will earn a small amount of interest, but they'll also have to pay the Swiss withholding tax. For this reason, most foreign account holders have their Swiss bank account in another currency.
Swiss law states that the bank can't disclose any information regarding an account (even its existence) without the depositor's permission. The only way information will be revealed is if a government agency says that a depositor is involved in a criminal act or some other financial issue (like bankruptcies, divorces, or inheritances). Furthermore, Swiss anti-money-laundering regulations also require depositors to provide proof regarding the origin of the funds they are placing in their accounts.
How Do You Open a Swiss Bank Account?
Non-residents of Switzerland must be over age 18 and will need to provide their passport and other identification documents when they open an account, along with documentation showing their profession and the source of their funds. These documents are closely scrutinized in order to prevent money-laundering.
Can You Hide Money in a Swiss Bank Account?
While Swiss banks were once synonymous with money laundering and tax evasion, the opportunity for illegal activity diminished after Switzerland began exchanging information about account holders with other OECD nations in 2018. While Swiss banking laws still afford a high degree of privacy, it is now much less practical to use them for illegal purposes.
How Much Does a Swiss Bank Account Cost?
Swiss banks may have a monthly charge for account holders, as well as minimum balance requirements. Requirements will vary from bank to bank.
The Bottom Line
Popular culture has made Swiss banks synonymous with espionage and hidden wealth. While the country's banking secrecy laws still afford a high degree of privacy, strict anti-money laundering laws make the country a much less practical haven for ill-gotten wealth. Anyone over 18 is free to open a Swiss bank account, provided that they can provide identity documents and demonstrate the source of their wealth.
FAQs
The minimum balance for Swiss bank accounts depends on the account type and can vary from free of charge up to millions of dollars. Generally, Swiss banks may require you to deposit at least 10,000 CHF ( $9,000 or EUR 6,800) within a month of opening your account.
Can US citizens have Swiss bank accounts? ›
Yes, it's legal for U.S. citizens to open a bank account in Switzerland. However, setting up a Swiss bank account requires a identity verification and you might have to provide various official documents that serve as proof of address and income.
What are the benefits of owning a Swiss bank account? ›
The main benefits of Swiss bank accounts include low levels of financial risk and high levels of privacy. Swiss law prevents the bank from disclosing any information regarding an account (even its existence) without the depositor's permission, except in cases where severe criminal activity is suspected.
Is it worth having a Swiss bank account? ›
Although the strict privacy laws have since been loosened in response to international pressures, Swiss banks continue to be considered one of the world's safest and most private places to store wealth. People with offshore trusts routinely open a bank account within the trust structure.
Do Swiss banks report to the IRS? ›
As of 2022, information about your Swiss bank account must be handed over to the IRS in the United States. The IRS is responsible for collecting taxes and assessing the wealth of Americans, even wealth held in Swiss bank accounts must be accounted for.
Do you have to pay taxes on a Swiss bank account? ›
Benefits of Swiss bank accounts (for expats)
Accounts held in Swiss Francs will earn a low-interest rate, but they will also have to pay the Swiss withholding tax. Therefore, most foreign account holders have their Swiss bank account in a different currency.
What are the disadvantages of a Swiss bank account? ›
Over the past decade a surge in litigation between Swiss banks and their clients has uncovered issues such as retrocessions, hidden fees, wrong advice, margin calls, mismanagement, and criminal fraud. At the heart of these disputes is the banking documentation that clients sign when opening their accounts.
Why do Americans open Swiss bank accounts? ›
In years past, opening a Swiss Bank Account was one of the primary ways U.S. Taxpayers could move money 'offshore' to a safe location and avoid the prying eyes of the IRS.
How much interest does a Swiss bank account pay? ›
The average interest rate across all Swiss savings accounts for adults is currently 0.81 percent. But the actual annual interest rates at individual banks range between 0 and 2 percent. Taking a moment to compare savings accounts is worth it.
Why do rich people prefer Swiss banks? ›
The Swiss Banking Act of 1934 made it illegal for Swiss banks to disclose the account holders' information to foreign authorities without their consent, unless there is evidence of criminal activity. This secrecy has made Swiss banks attractive to those who value their financial privacy.
Residents of almost any country worldwide can open Swiss bank accounts and Switzerland is indeed one of the most renowned countries when it comes to opening accounts for foreign nationals. A Swiss bank account still offers security and privacy.
How to open a Swiss bank account from the USA? ›
Which documents do you need to open a bank account in Switzerland?
- Proof of identity — a current passport.
- Proof of residence status — visa, residence or work permits as required.
- Proof of address — recent utility bills or official correspondence.
Can I open a Swiss bank account without residency? Yes, non-residents and foreigners can open a Swiss bank account either in person or online. Additional charges may apply if you want to open an account remotely. You're also required to provide the required documentation to prove your identity and income source.
Which Swiss bank is best for foreigners? ›
One of the most recommended banks for expats living in Switzerland is UBS (Union Bank of Switzerland). This bank offers a wide range of services specifically tailored for expats, such as international account opening, multi-currency accounts, and assistance with tax and legal matters.
Can a foreigner open a bank account in Switzerland? ›
"Yes, non-residents can open a bank account in Switzerland. However, you must be over 18 and show your passport and additional identification documents during the account opening, such as documentation of the source of the funds and paperwork related to your profession.
Why is a Swiss bank account so special? ›
So, what's so special about Swiss bank accounts? In the simplest terms, Swiss banking has a reputation for anonymity and the ability to safeguard substantial assets from public scrutiny. As an international banking leader, Swiss banks offer unprecedented professionalism.
Is it hard to get a Swiss bank account? ›
Requirements You Need To Open A Swiss Bank Account. Opening a Swiss bank account isn't a difficult process. However, the main difficulty comes when trying to navigate the many requirements and documentation necessary to even begin opening the account. Part of what makes Swiss banks famous is their security.
