What is your view on small institutions that are offering some attractive fixed interest rates?
I need to temporary transfer my second pillar on a vested benefits account, and the most attractive I could find is with Clientis Oberuzwil (1.75%). However, I’m a bit puzzled by the size of it (25 employees, ~900M in assets according to Wikipedia) and have a hard time to figure out the level of risk that implies
Beyond my own example, I thought it was worth opening a debate on small banks, so don’t hesitate to broaden the debate.
Generally speaking, if you don’t feel comfortable / loose your sleep over decisions like that, better avoid it. Chasing small amount of extra yield is not worth the peace of mind you get elsewhere knowing your capital is safe.
You can try asking some larger (local) banks what offers (for vested benefits) they have, they don’t always advertise it prominently. Know someone who was able to get a good deal at their local Raiffeisen branch last year.
They exist since 1874 and the name “Clientis” implies that the bank is part of the Clientis Group [1], which itself is part of the Entris Holding [2], so the whole thing is a bit bigger I guess.
Additionaly, the vested benefits account is most likely with Privor [3], which has more than CHF 1B in client assets, with over 25k customers. Your assets will be managed by the foundation, not the bank itself anyway, so it kinda doesn’t matter what happens with Clientis Oberuzwil.
Investing in equity is not an option in my case, I only need this vested benefit account for 9-12 months while I’m taking a career break, so I can’t afford volatility (cf. this post )
I’m just looking for a safe option, so I’m only counting on interest rates
For vested benefits, there is no esisuisse insurance coverage for them and they just get preferential treatment in case of bankruptcy. That means they are part of the second priority class in case of bankruptcy, which comes after liabilities incurred during or for the bankruptcy process (first class) and before non-privileged liabilities.
If I had doubts about the solvency of a bank, that preferential treatment would not be enough for me. For the slight difference in returns, return of capital wildly trumps returns on capital to me. I would choose a bank with which I am confident, preferentially one that benefits from a state guarantee (several cantonal banks do, though not all).
For savings accounts, they are insured by esisuisse up to 100 kCHF provided the bank is a member of the association. I would check that they are, using the esisuisse website, and if they do, feel confident enough and not consider a smaller bank as less safe than a bigger one. I would not keep non-preferred assets in amounts exceeding 100 kCHF in any single bank no matter how safe it seems.
The portfolios of Swiss regional banks are largely made up of real estate/mortgages in the region that they operate in. Because of this, I would personally consider regional banks in regions with strong real estate growth potential to be stronger than those in regions with dwindling populations.
On the whole, regional banks invest very conservatively, at least if you consider Swiss real estate to be a conservative investment. With regards to savings, regional banks generally offer better depositor protection because their total deposits are more likely to fit within the maximum amount guaranteed by Esisuisse.
Do note that Clientis Oberuzwil does not offer 1.75% anymore. The rates payable in their SARON Savings account solution have been reduced to 1.5% for amounts above 100k and 1.6% for amounts exceeding 2mln.
You can read their balance sheet & PnL to see how they do business.
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