Moneyland comparison and background information:
Some more background:
And here I am going to add a link on the summary of current rates for fixed term deposits of various kinds that I found in old posts:
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That is not that bad actually 1% for 5 years, wondering what is the risk…
What exactly?
一二三四五六七八九十
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I meant the risk for the cembra bonds
These are not bonds, but a product specifically for retail customers.
Your deposit is protected by the state protection program up to 100k CHF per bank-customer relationship. So if you stay below this threshold, no essential risks.
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Yes.
Yes, as well as no value fluctuation and a state guarantee on deposited amount up to 100k per issuing bank. So it basically gives a AAA security to a bond with a BBB yield.
They are 2 years minimum, shorter once are called Festgeld I think.
Oh yes.
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I am trying to familiarize with these products too (Kassenobligationen, Festgeld) How would you typically purchase them? through a normal broker?
I have seen Postfinance has web pages on them, would be quite convenient to just move funds from there, but it’s quite confusing as they say the products are unavailable at the moment ?
While for Festgeld, apparently you have to phone to arrange?
No. You open an account with the issuing bank directly.
Kassenobligationen were long time neglected, so many banks just stopped posting any rates. Or maybe they are preparing for the next rate hike by SNB.
Yes. Same story, and I think at Postfinance it is 100k minimum.
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Now I am actually thinking about opening an account with Cembra. There are short term notes
https://www.cembra.ch/en/savings/medium-term-notes/
By concluding this medium-term note transaction, you are simultaneously opening a free custody account, in which the investment will be deposited.
New customers must always open a deposit account. Buying medium-term notes is not possible without opening a deposit account.
Ok fine.
The deposit account:
https://www.cembra.ch/en/savings/deposit-account/
The account opening is free of charge.
The closing of account costs CHF 25.00.
Fine.
Account management is free of charge if there are running medium-term notes or the balance of the deposit account is higher than 50 000 CHF.
Had anyone opened a deposit account with Cembra and subscribed medium-term notes? I would love to have some information from the first hands.
Q1: Is it possible to open a joint account?
Q2: Is the whole thing really free if I have any medium-term notes subscribed? The minimum subscription is 20k, not little, but still less than 50k.
Many thanks in advance.
These are annual rates, right?
2 years: 0.8%
3 years: 1.25%
4 years: 1.5%
5 years: 2%
…
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Yes these are annual rates.
Hello Mustachians,
I was wondering if there are any term deposits (for 12 months - 3 years closed, without fees and interest rates in the range of 1%+) in reliable and safe banks / financial institutions…
I have found Cembra, Reiffeissen, Baloise to have attractive conditions related to that… around 1% and PF lagging behind with term deposits interests around 0.6%…
Do you know any other providers for term deposits?
Or any other reliable and stable solution for that kind of returns?
Can you get something higher than those online interest rates if you maybe negotiate in person?
To my view for instance in case someone has around 100kCHF deposits in PF gets no interest at all and is paying 144CHF yearly for account management fees!
If you would just simply deposit those money in Cembra and get 1% for 2 years with 0 fees you will get finally 2000-Chf after two years (plus not paying 144*2 = 288 chf to PF)
Are there any other risks or something not taken into consideration here?
The money is locked away for two years. If inflation stays high and the SNB raises interest rates again then the opportunity cost of locking away 100k at 1% p.a. might hurt. If you don’t need the money and it’s just sitting in your bank account anyways then yes this is a decent option, compared to investing in stock or bond ETFs, that’s a more difficult choice to make.
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why not buy one or more short-term bond(s) instead? you can get a slightly higher yield / net return while being more flexible in case the money is needed unexpectedly.
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Could you please provide some examples / links?
Note that it is difficult to find a broker which allows to trade Swiss bonds and has low trading fees. I mean, it probably doesn’t exist.
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@Leonidasgr sure, let’s make an example. @Dr.PI brings up a good point, as net return will depend on total costs. but still, liquidity/flexibility should be part of the equation as well.
let’s look at the bond and its yield, for example: ZG112
of course there are lower and higher yields (relevant for return/risk), but as you mentioned some banks, that’s a good one for comparison. there are also different maturities/terms (some impact as well), of course, i simply chose one that’s close to a year. for the bond ZG112, buying at current ask price, the yield at maturity would be ~1.4%. that’s the gross return, before costs.
you mentioned ~100k in cash, so i assumed there’s more money around and you’d be also trading/holding stocks. a) if so, swissquote offers ‘flat fee trades’ which can get transaction costs down to 39.- each for 20 trades in total (lower if even more). so that’s a ~0.04% cost per trade on 100k. b) if not, it’s 190.-, i.e. 0.19%, plus ~100.- ‘depotgebühr’, i.e. ~0.1%. we also have to add ‘umsatz-/stempelabgabe’ and minor fees, let’s make it a ~0.1% cost for buying the bond. in total, the costs make up a) ~0.14% or b) ~0.43%, respectively. so, net return could be ~0.97% or ~1.26% for that example.
btw: if medium-term notes are your fav, i like NKB.
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You should also deduct income tax on distributions by the bond. It is coupon that is taxed, not yield, although in this case they are close.
And most importantly: Kassenobligationen are protected by the state insurance fund up to 100k CHF, which should be enough for most private investors.
could as well choose a bond with a low coupon, that’s why i didn’t mention it for the example.
yep, it’s safer in that regard. but also less liquid, which is also a form of risk.
Cembra Medium-Term Notes
2 years: 1.5%
3 years: 1.75%
4 years: 2%
5 years: 2.25%
6 years: 2.35%
7 years: 2.45%
8 years: 2.55%
9 years: 2.65%
10 years: 2.75%
It is getting more and more interesting.
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