A Swiss multinational investment bank and financial services company Credit Suisse is set to start charging wealthy clients with large cash deposits in Swiss francs, the latest Swiss bank to pass on negative interest rates to customers.
Hence, Switzerland’s second biggest lender said, individual and business customers will be charged a rate of -0.75% on cash balances above 2 million Swiss francs ($2.02 million). Balances of less than 2 million francs will be unaffected.
A rate of -0.85% will be imposed on business customers with balances above 10 million francs.
The new rules take effect from Jan. 1 for individual customers and Nov. 15 for business customers.
Credit Suisse’s cross-town rival UBS in July said it would charge a -0.75% rate on deposits above 2 million francs, while Postfinance charges fees to private customers with balances above 500,000 francs.
Several banks in Switzerland, including private bank Julius Baer, and the eurozone also pass on the cost of negative official rates to corporate depositors, though most large players have refrained from doing so with individual clients.
Credit Suisse recently said, “As other banks have been doing for some time, Credit Suisse is introducing negative interest rates for clients with very high Swiss franc cash holdings.”
“The reason for this is the persistent negative interest rate environment.” Credit Suisse added.
The Swiss National Bank (SNB) has charged a negative rate of -0.75% since January 2015 on deposits parked with the central bank by commercial banks overnight, one of the tools the SNB uses to deter investor appetite for the Swiss franc.
Many economists expect the SNB to take the interest rate lower next year to prevent further strengthening of the safe-haven currency, which could damage Switzerland’s export-reliant economy.
