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Savings customers fail to benefit from rate rises

Interest rates in Switzerland are rising, but Swiss banks have so far failed to pass on the benefits to people with savings accounts. Despite sharp rises in base rates, the return offered by most savings accounts remains low by comparison.

Interest rates in Switzerland are rising, but Swiss banks have so far failed to pass on the benefits to people with savings accounts. Although the Swiss National Bank has more than doubled its base rate since August 1999, rates for savers have yet to follow suit.

Interest rates for savers with traditional accounts currently vary between 1 per cent and 1.5 per cent. But base rates have now reached 2.3 per cent.

One explanation put forward by the banks for failing to pass on the better terms to customers is that interest rates for savings accounts are traditionally more stable than other rates. As a result, they are less likely to go up – or down – in a rapid manner. Nevertheless, economists concede that pressure for a rise is growing.

However, among the key banks, there are few who will commit to raising rates in the short term. Spokesmen for Credit Suisse and UBS both say no decision has yet been taken, but that they are watching the market carefully. Other firms are sending out similar messages.

In the meantime, it appears savers in Switzerland are starting to put their money elsewhere. Recent statistics from the Swiss National Bank show the number of savings accounts declined in 1998 for the first time in a decade.

Conversely, sales of other products, such as life insurance policies, are taking off.

From staff and wire reports




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SWI swissinfo.ch - a branch of Swiss Broadcasting Corporation SRG SSR