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Old 27.05.2021, 08:35
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What to do with bank balance

We are sitting on a bank balance ( mid 6 figure ) for a while now because we have been looking at buying a house in the Mediterranean region, and not wanting to have the money in anything volatile / illiquid since we don't have a handle on the timing.
The relationship manager has mentioned that they will probably start applying negative interest rates soon.
Any ideas on where I can park this money?
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Old 27.05.2021, 08:37
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Re: What to do with bank balance

In cash in your matress.

Tom
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Old 27.05.2021, 08:51
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Re: What to do with bank balance

Put half in a fund managed by your bank on the understanding that they will not charge negative % on the balance still on deposit.

The banks will charge a fee for managing the fund, but with luck the increase in value of the fund should exceed their fees. Ensure that you can close the fund at any time with very short notice.

There is a risk that the fund could fall - another lockdown/pandemic, market crash etc. But as things look over the next 12 months as economies open up it should be ok....
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Old 27.05.2021, 08:52
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Re: What to do with bank balance

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We are sitting on a bank balance ( mid 6 figure ) for a while now because we have been looking at buying a house in the Mediterranean region, and not wanting to have the money in anything volatile / illiquid since we don't have a handle on the timing.
The relationship manager has mentioned that they will probably start applying negative interest rates soon.
Any ideas on where I can park this money?
You can park it in my account
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Old 27.05.2021, 08:57
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Re: What to do with bank balance

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In cash in your matress.

Tom
This or DOGE coins
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Old 27.05.2021, 09:18
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Re: What to do with bank balance

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We are sitting on a bank balance ( mid 6 figure ) for a while now because we have been looking at buying a house in the Mediterranean region, and not wanting to have the money in anything volatile / illiquid since we don't have a handle on the timing.
The relationship manager has mentioned that they will probably start applying negative interest rates soon.
Any ideas on where I can park this money?
open an account with other banks and spread out the cash.

you can also store up to 100k without penalty in interactive brokers.

you can bring down balance a bit by prepaying your expenses e.g. taxes
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Old 27.05.2021, 09:24
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Re: What to do with bank balance

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Put half in a fund managed by your bank on the understanding that they will not charge negative % on the balance still on deposit.

The banks will charge a fee for managing the fund, but with luck the increase in value of the fund should exceed their fees. Ensure that you can close the fund at any time with very short notice.

There is a risk that the fund could fall - another lockdown/pandemic, market crash etc. But as things look over the next 12 months as economies open up it should be ok....
OP said they don't want to invest the money in anything volatile.
"bank's fund, luck, risk and should" keywords would eliminate your option IMO.
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Old 27.05.2021, 09:28
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Re: What to do with bank balance

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Put half in a fund managed by your bank on the understanding that they will not charge negative % on the balance still on deposit.
Don't do this... BANKS are not good at managing investments.
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Old 27.05.2021, 10:54
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Re: What to do with bank balance

I wonder if you buy Gold/Silver and hold them, is that a better option.
Cash also loses value (inflation) but CHF has been a very strong currency.
Other approach could be buying Blue Chip CH stocks and holding them. You get a dividend amount of 4-5% which could potentially address stock price downsides.
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Old 27.05.2021, 11:02
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Re: What to do with bank balance

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We are sitting on a bank balance ( mid 6 figure ) for a while now because we have been looking at buying a house in the Mediterranean region, and not wanting to have the money in anything volatile / illiquid since we don't have a handle on the timing.
The relationship manager has mentioned that they will probably start applying negative interest rates soon.
Any ideas on where I can park this money?
Why wait with the property investment?

Property prices in Mediterranean resorts are still relatively depressed now due to Covid, Brexit etc.

If you don't have an immediate use for the property, rent it out so you can at least cover the costs of maintenance.

Or if you are thinking of building new, buy the plot now and wait with the building until you are ready to do so.
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Old 27.05.2021, 11:42
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Re: What to do with bank balance

Keep savings at various banks.
Besides paying negative interest there is the danger, if the bank goes bust, of losing anything over the insured limit. Most private banks are insured up to 100K per customer. Cantonal banks are insured by their respective cantons but not all have a full guarantee.
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Old 27.05.2021, 12:06
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Re: What to do with bank balance

Buy-in into your pension plan, if you still can...
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Old 27.05.2021, 13:00
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Re: What to do with bank balance

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The relationship manager has mentioned that they will probably start applying negative interest rates soon.
Any ideas on where I can park this money?
Free parking is getting rare these days. Especially, if you want no or virtually no risk and protection from elements.

There are 2 main strategies, if you want to keep the money with some bank(s):
  1. Open more accounts with other major banks or their mobile spinoffs and keep smaller amounts at each of them. This is inconvenient timewise, but no financial charges.
  2. Move money to a bank like Credit Suisse, which still allows for up to 2M CHF without negative rates. They have other fees, thought, so make sure to be aware of them.

You've told, that it is not an option, but I still feel a need to mention, that since you are going to spend EUR, it would make a lot of sense to put a portion of your assets into some major low-risk EUR-nominated fund from Pictet, Allianz or any other large government backed EU financial group.
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Old 27.05.2021, 13:31
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Re: What to do with bank balance

Why do you want to keep it in CHF? Buy the target currency now, rather than later.
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Old 27.05.2021, 13:34
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Re: What to do with bank balance

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You've told, that it is not an option, but I still feel a need to mention, that since you are going to spend EUR, it would make a lot of sense to put a portion of your assets into some major low-risk EUR-nominated fund from Pictet, Allianz or any other large government backed EU financial group.
CHF has already dropped a few % against the EUR. It's worthwhile keeping an eye on the exchange rate and 'locking in' at some point.
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Old 27.05.2021, 13:41
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Re: What to do with bank balance

you can start by buying a bottle of wine https://www.englishforum.ch/daily-li...ttle-wine.html
sorry, could not resist
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Old 27.05.2021, 21:16
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Re: What to do with bank balance

If you are not certain that you will buy a property within 2 years I would seriously look at investing the money, at least partially or to whatever level your are comfortable with

Stock market long term average return is 7% pa. If you currently have 500k then after 10 years you could reasonably hope for it to double it to 1m.

Stocks are volatile and nothing is guaranteed in the the short term, but statistically the odds are stacked in their favour whilst Central Bank policies involve interest rates close to 0%

I know many people in CH keeping cash for this reason but the house purchase never happens
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Old 27.05.2021, 21:28
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Re: What to do with bank balance

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If you are not certain that you will buy a property within 2 years I would seriously look at investing the money, at least partially or to whatever level your are comfortable with

Stock market long term average return is 7% pa. If you currently have 500k then after 10 years you could reasonably hope for it to double it to 1m.

Stocks are volatile and nothing is guaranteed in the the short term, but statistically the odds are stacked in their favour whilst Central Bank policies involve interest rates close to 0%

I know many people in CH keeping cash for this reason but the house purchase never happens
He is not looking for volatility and his time horizon is much shorter.

Yes, in ten years you could have double the amount. Or half of it. Let's not forget that many markets haven't reached yet the highs from many years ago.
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Old 27.05.2021, 21:32
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Re: What to do with bank balance

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Or if you are thinking of building new, buy the plot now and wait with the building until you are ready to do so.
I've heard advice against this, because one's needs and wishes can change, as can the local by-laws and the committee to approve one's plans, so that the dream piece of land, now, may not turn out to provide the dream home by the time one gets around to trying to build it.
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Old 27.05.2021, 21:45
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Re: What to do with bank balance

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Free parking is getting rare these days. Especially, if you want no or virtually no risk and protection from elements.

There are 2 main strategies, if you want to keep the money with some bank(s):
  1. Open more accounts with other major banks or their mobile spinoffs and keep smaller amounts at each of them. This is inconvenient timewise, but no financial charges.
  2. Move money to a bank like Credit Suisse, which still allows for up to 2M CHF without negative rates. They have other fees, thought, so make sure to be aware of them.

You've told, that it is not an option, but I still feel a need to mention, that since you are going to spend EUR, it would make a lot of sense to put a portion of your assets into some major low-risk EUR-nominated fund from Pictet, Allianz or any other large government backed EU financial group.
What do you mean by low risk fund? If equities then it doesn't matter what the denomination is.
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