How a Swiss Bank Works

Just the mention of a Swiss bank account will conjure up images of intrigue, espionage, multi-millionaires and exiled dictators. The secrecy cloaked around Swiss accounts is legendary; however, you don’t need to be wealthy or a fleeing despot to enjoy the benefits of an account. There are different types of accounts to suit anyone’s income or lifestyle. What they all have in common are privacy and security.

Privacy

The Swiss Banking Act of 1934 set the standard for bank privacy. This act made it illegal for bankers to divulge account information about their customers to anyone unless there is a criminal complaint. Client information is considered privileged and confidential and there are severe penalties for banks and individuals who breach this agreement, most notably prison and a steep fine.

There are the infamous “numbered accounts,” which as the name suggests, has a number or even a code word attached to them. They require an initial deposit of $100,000 and an annual maintenance fee of $300. These accounts can be opened in person or by mail, but banks prefer for these accounts to be opened in person. These accounts are not completely anonymous as most people believe. There are a few people at the bank who must know the name that goes with the numbers. Even though Swiss bankers must keep their code of silence, there must be records detailing account ownership.

There are many standard-issue accounts available for the person who doesn’t have the $100,000 but would like the semi-anonymity benefits of a Swiss account. You can open a basic account for $3,500 and can do it via mail or fax. Your privacy is still protected, just as it would be with a numbered account.

Security/Low Risk

Swiss deposits are protected and governed by the Depositor Protection Agreement of the Swiss Bankers Associations (SBA). This covers all deposits and even non-bank securities.  The agreement guarantees that in the event of bank collapse, depositors will receive their claims quickly. Not only are there safeguards in case of bank failure but the Swiss franc is one of the world's strongest currencies and is backed by at least 40 percent gold reserves. Swiss banks are also renowned for sophisticated investment services, so if you choose to have a Swiss account, it will be in one of the safest banking systems in the world