Credit Suisse will start debiting wealthy customers with large cash deposits in Swiss francs, the latest Swiss bank to pass on negative interest rates to customers.
ZURICH: Credit Suisse will start debiting wealthy customers with large cash deposits in Swiss francs, the latest Swiss bank to pass negative interest rates to customers.
Individual and corporate customers will be charged an interest rate of -0.75 per cent on cash needs over Swiss francs (US $ 2.02 million), says Switzerland's second largest lender. The balance of less than 2 million francs is not affected.
A tax rate of -0.85 percent will be imposed on corporate customers with a balance of more than FRF 10 million.
The new rules come into force from January 1 for individual customers and November 15 for corporate customers.
Credit Suisse's two-city rival UBS in July said it would charge a -0.75 percent interest on deposits over FRF 2 million, while Postfinance charges private customers with balances over FRF 500,000.
Several banks in Switzerland, including the private bank Julius Baer, and the euro area also pass on the cost of negative official interest rates to the company's depositors, although most major players have refrained from doing so with individual customers.
"As other banks have done for some time, Credit Suisse introduces negative interest rates for customers with very high cash in Swiss francs," Credit Suisse said on Friday.
"The reason for this is the persistent negative interest rate environment."
Swiss National Bank (SNB) has charged a negative interest rate of -0.75 percent since January 2015 on deposits parked with the central bank of commercial banks overnight, one of the tools used by SNB to deter investors' appetite for the Swiss franc .
Many economists expect the SNB to take a lower interest rate next year to prevent further strengthening of the security currency, which could damage Switzerland's export-dependent economy.
(Reporting by John Revill and Oliver Hirt; Editing by David Goodman])