Credit Suisse called me a few days ago offering me 1.5% interest if I open a new account and transfer minimum CHF 50K into the account from another bank i.e. not shift money from current CS account. Account is open and money can be withdrawn at any time.

This sounds like a good deal, although I am a bit worried that this may be a last gasp before going belly up.

If I remember correctly, by law deposits up to CHF 100k are protected in case of bankruptcy. More than that would be additional insurance.

That's only if the total payments are no more that 8 billion (sechs Milliarden). If CS were allowed to fail, it could easily bring down other banks with it... I wouldn't bet on these 100k. esisuisse
FINMA

Unsolicited advice: transfer current balance to another bank…

Transfer balance to gold and stash it somewhere safe. One of the great things about being in Switzerland is that you can easily and quickly purchase Gold .. well, much more easily than in most other countries.



(Note: this is not financial advice ).

If you open an account in CS you will find yourself in UBS in 6 months.

Sincerely hope this is not the case

My pension invests in Credit Suisse Index Funds. Any idea if they would also be protected by the 100k deposit protection also?

Spoke to a person who sits on the board of our pension fund today. Apparently these investments are protected.

… and the underlying investments should not be affected

I'll stay with the ZKB.

Mrs. LP has pension funds with CS. Performance has been lousy, although slightly positive, averaging 0.93% over the last 8 years. However, the funds are protected.

CS are offering bonds paying double digit rates of interest... if you want to earn lots of interest before losing all of it

Technically, they offered them years ago, and now they just produce double digit yield


But yeah, good luck getting some of that as a retail investor. The juicy stuff is 10-year maturity and their minimum clips are substantial.

What would happen to my mortgage if things go really bad with CS?

I still have 6 years on my 10 year contract, and since my wife stopped working after we bought the house it would be difficult to find a new one due to portability issues.

In the unlikely event of a bank collapse, mortgage contracts continue and would be transferred to other banks

In general, if the Swiss Financial Market Supervisory Authority Finma opened bankruptcy via a bank in Switzerland, the customers of this institution could not make payments from the accounts of this bank and the e-banking of the bank concerned would also be blocked. Likewise, a withdrawal of money at the ATM or at the counters of the institution would no longer be possible. Deposits in a bank in exchange are secured in Switzerland via the statutory deposit insurance up to a maximum of 100,000 francs per customer and bank.


However, mortgages of an affected bank would not be affected by bankruptcy., the contract simply continues even in such a situation. The customer continues to owe the bank the interest and amortization. When due, you have to repay the mortgage in full. In the event of a specific bankruptcy case, the bankruptcy liquidator would contact the mortgage customers in writing to announce the modalities of the payments of interest, amortization or repayment.

Another bank would buy it, and probably the contract will mean they have to keep the same terms until maturity.


Kind regards




Ian

Yeap, bankruptcy basically means "can't cover my liabilities here", so the deposits (which are a liability for the bank) are not fully covered by the assets.


This does not mean that everything goes to the wall and both assets and liabilities go to zero. It just means that an administration takes the assets, distributes them left and right, and whatever cash they recover they distribute to the people the bankrupt entity is liable to.



That's why if it's just a cash run to the bank but the bank is generally solvent and just can't generate cash that quickly, someone bigger (like the central bank) can take longer date assets and bridge the situation. The value is there, it's just locked in for some time and cannot be turned to cash immediately.


If the bank mismanages though, and they don't have enough value to liquidate (or borrow against), then the depositors (and other creditors) have an issue as sum of liabilities is not covered by the assets.

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