What's best to do with euros sitting around

Investing / Portfolios
41

I’d split it into 7x100k and deposit it at 7 banks. Most banks don’t charge negative interest rates for a 100k balance. Also, deposits are insured for up to 100k (or there is a higher state guarantee). What comes to my mind are free “EUR Sparkonto” products, offered for example with good conditions from Aarguauische Kantonalbak, Basler Kantonalbank and Cler (notes: these are free, but outbound transfers from these accounts are not; cantonal banks will open an account via paper mail). I think Migrosbank offers a free EUR account as well. EUR savings accounts in EU countries pay even positive interest (I have one paying 0.5%) and have guarantees for up to 100k as well.

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42

Thank you all for your useful insights. I’ll follow some of the advice and convert most of the EUR into CHF then split it up into different 100k accounts, and I’ll gradually invest a good part of the money in ETFs. The main reason for not going all in in stocks at once is that I’m quite negative on the current state of the global economy, even if I know that on the long run it’s probably irrelevant and it will be next to impossible to enter the market at the lowest. I’m still quite bad at managing human emotions…
On another note, what’s the best way to convert EUR to CHF? In the past I already used B-sharpe and Wise and they worked well, but if I understand correctly IB has the best exchange rates. As far as you know can I open an account with IB just to convert EUR into CHF or are there limitations in place?
Thanks!

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43

It probably works, but they don’t like it (they’ve been telling people who were using IB purely for converting cash to stop). Probably nothing will happen if you do it once, and don’t care about your long term relationship with them.

(If you use them as your primary brokers, that’s probably good enough for them if you also convert once in a while)

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44

Don’t think they care much, but if you want to invest in US ETFs, then invest a small (10k ?) amount already now. There will be nothing suspicious in your activity.

Or CHSPI or any other ETF or anything. I was trying to use different brokers, but finally concentrated all stock funds at IB. The main goal was to increase my margin.

45

I think you qualify for special treatment because of the big amount, see for example:

So you will probably get better conditions, but on the other hand it’s much harder to compare the different providers.

46

Still I think IB is cheaper and more reliable for an exchange of such amount of cash.

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47

EURCHF has fallen below the previous historical minimum from January 2015, buy the way.

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48

Yeah but what to do with all those euros ?
Do you stack them for a rental property down payment ?

49

to many people thinking EUR will recover, the only people longing EUR is retail and this is why it will fall further. Energy prices just did a x7 in Germany, the DAX is in freefall, i don’t see a way where the EUR will recover quickly.

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50

Actually I was wrong (data source problem). In January 2015 EURCHF has dived to 0.862 :scream:

51

Could you link your source, please? This doesn’t match my memory (though that doesn’t matter much), or some top results from Google.

52

The first few results for a google search “eur chf january 2015” show exactly that, it was on the 15.01.2015 when Switzerland abolished the 1.2 peg to the EUR.

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53

TradingView, EURCHF feeds from FXCM (wrong, well, rather it probably wasn’t traded at this price there) and from forex.com (minimum 0.86288).

Also cash.ch mentioned 86 Rappen / USD in 2015, that’s when I started to doubt.

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54

Yeah, it was some minutes and after one week EURCHF was again over 1. Until March and again from June on.

55

Hi all,

I had the same question so I post it here. But my possible options are different.
I have Euros sitting in a Swiss bank account (and costing dozens per year fees), as I opened this account years ago.
Now the options I am exploring are:

  • leave it here and wait the change rate is back to what it was (and continue to pay yearly fees) before closing it;
  • close it now, send it to a CHF account and lose the money from the change;
  • transfer it to a free EUR account (what bank does that?).

Thanks for your advices!

56

Let’s say you have 10k EUR sitting there.

Now imagine that instead of those, you have 9.6k CHF in your regular account, what would you do:

  • nothing
  • open a free EUR account (eg DKB) and convert to 10k EUR
  • open a EUR account at your bank and convert to 10k EUR
  • something else

Considering the FX loss in your decision is a sunk cost fallacy, it shouldn’t be part of the equation.

2 Likes
57

See above.

Yuh, but… see above.

58

Eurozone inflation rate Aug 2022 9.1%=> real cost of holding 10,000 Eur cash can be thought of as 910 Eur/yr

Swiss inflation 3.5%: real cost of holding 9600 CHF = 336CHF/yr

Above is before bank fees and any interest paid or charged by your bank (ECB rate is currently positive, SNB rate negative, not sure many retail banks are passing rates onto customers for small deposits)

Note that Euro zone currencies have declined by ~2% p.a. vs CHF over the long term

59

Eurozone inflation only matters to you if you’re having your spending in the eurozone.

If you’re in CH, you should only care about the FX (and interest rates) differences when comparing the currencies, the price of gas in Germany doesn’t affect your spending.

And looking at the long term movements of currency also need to take into account the delta in interest rates (0.75% between Germany and Switzerland in most of the past decade).

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60

Hi everyone.
What are the latest advices for EUR sitting in a saving account in CH?
Thx!