The SNB lowered interest rates

[Baptiste Wicht]

Hi

If you have not seen the news, I am sharing it here: A few days ago, the Swiss National Bank (SNB) cut its interest rate by 0.25% to 1.25%.

1. Update from September 2024: The SNB reduced it again to 1.00%

What consequences can we expect?

The first direct consequence was that the CHF lost value against the USD and EUR.

Another consequence is that some banks will start to cut their interest rates as well. Basically, all banks that are offering more than 1.5% will likely cut their rates. WillBe has already done this, for instance.

We can also expect new mortgages to go lower at some point, but this will not be instant. And this may cut the trend of increasing reference mortgage rates as well. With that, we may not see another reference hike, but that's not guaranteed, given the computation on the average mortgage rates.

If you want to learn about the reference interest rate, you can read this article:

Renting In Switzerland - All You Need To Know - The Poor Swiss

Most people are renting in Switzerland, but there are many things you need to know to avoid issues because there are some complex surprises!

thepoorswiss.com

What do you think about this? Should I post more news like this in the forum?

 

[Baptiste Wicht]

As a result of the lower rates by the SNB, Radicant also decreased their rates from 1.50% to 1.25%.

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Radicant is a new digital bank account focusing on sustainability. We review it in detail to see its pros and cons and whether you should use it!

thepoorswiss.com

 

[Ralph]

So did Willbe unfortunately. Still like their account. I am a bit careful with the cembra one. Also have a Cler but not sure it's further the inflexibility

 

[Blackcat]

If only the mortgages were updated with the same speed as deposit interest reduced...

 

[Baptiste Wicht]

If only the mortgages were updated with the same speed as deposit interest reduced...

The way they are calculated is indeed quite complicated. The SARON itself will go down, as will the interest rate. But the problem is that most banks are using a compounded SARON rate, so this will be an average and will take a little while to go down.

 

[justatreeinthesea]

And it's happening again. Most banks will now offer rates below 1% ;(

 

[Baptiste Wicht]

Thanks, it's good indeed for mortgages that they decreased it again to 1.0%.

However, this does not mean we will see mortgages below 1%. Banks have their premiums on top of the SNB rate, so, I would be surprised if we see anything better than 1.3% now.

 

[justatreeinthesea]

Thanks, it's good indeed for mortgages that they decreased it again to 1.0%.

However, this does not mean we will see mortgages below 1%. Banks have their premiums on top of the SNB rate, so, I would be surprised if we see anything better than 1.3% now.

I was more crying about the low interest rate on cash .

What do you think about this? Should I post more news like this in the forum?

Since you can code (and thus scrape websites), it could be cool to have a ticker/table on the blog with the top 5 interest rates offered by banks. These things change quite often and customers are not always notified.

Could also be an article on savings (like moneyland) where you could have all your referral links and an always up-to-date table.

 

[Baptiste Wicht]

I was more crying about the low interest rate on cash .

Interest is indeed faster to go down than mortgages

Since you can code (and thus scrape websites), it could be cool to have a ticker/table on the blog with the top 5 interest rates offered by banks. These things change quite often and customers are not always notified.

This is a good idea, but a lot of work indeed. Scraping is not that difficult. But the problem is that these websites change all the time and this would require a lot of work, for little value in the end. But I

Could also be an article on savings (like moneyland) where you could have all your referral links and an always up-to-date table.

I have an article on short-term investments and even that is a pain to maintain:

The 5 Best Short-Term Investments - The Poor Swiss

Sometimes, you cannot keep your money invested for a long time. For these cases, here are the best short-term investments for your money.

thepoorswiss.com

 

[gaijin]

I have an article on short-term investments and even that is a pain to maintain:

I fully understand this pain. I just looked at the Medium-term notes and did the search on Moneyland. I could not reproduce the 2.1% Cembra rate mentioned on your site.

 

[Baptiste Wicht]

I fully understand this pain. I just looked at the Medium-term notes and did the search on Moneyland. I could not reproduce the 2.1% Cembra rate mentioned on your site.

These can basically change every month. This is why I always mention the date I collected the data. The rates have significantly since July 2023. I have updated the rates again as of September 2024.

 

[justatreeinthesea]

So, things are starting to settle. For unlimited accounts:
- wiLLBe, 0.85% until 50k and then lower
- Radicant, 0.75% up to 100k, then 1% up to 250k, then 0.75% again. Unclear if that applies to the whole amount or not
- Alpian, , 0.75% up to 100k, then 1% on the full amount up to 1M

 

[Baptiste Wicht]

- Alpian, , 0.75% up to 100k, then 1% on the full amount up to 1M

I don't think that part is correct.

The way I read their doc

Earn 0.75% annual interest on deposits up to CHF 100,000, and 1% for amounts over CHF 100,001 and below CHF 1,000,000. For balances over CHF 1,000,001, reach out for a custom rate.

You would get 1.0% only on the amount above 100'000. SO, if you have 150'000, you will get:
* 0.75% on the 100'000 CHF
* 1.0% on the 50'000 CHF

 

[justatreeinthesea]

I don't think that part is correct.

Actually, it is and it's one of their unique selling points, but their website should be updated. I think Radicant is trying to follow suite, but I'm waiting for their confirmation.

From Alpian's recent communication about the SNB lowering their rate:


and this is from Radicant

 

[justatreeinthesea]

Radicant has confirmed that their calculations work like most other banks. You only get 1% on the part which is above a 100k. A shame.
And with Alpian, you have to live with the risk that anything that you keep above that threshold can be lost at any moment .