Swiss financial institution imposes substantial fee on American clients residing in Switzerland.
In a recent development, Swiss bank Zürcher Kantonalbank (ZKB) has announced that it will be charging American customers living in Switzerland an additional fee due to the increased costs associated with US regulatory requirements. This move reportedly makes ZKB the first bank to pass these costs directly onto customers with US citizenship.
The fee, amounting to 20 francs per month or 360 francs per year, has been communicated to all ZKB customers with a Swiss address and American passport via a letter sent out last week. The bank experiences higher expenses for US customers, regardless of the type or number of banking services used or transactions conducted.
The additional costs are primarily due to the foreign currency transaction surcharges and ATM withdrawal fees, which form part of ZKB's standard pricing rather than specific penalties. For payments abroad or in foreign currency, ZKB charges a 1.25% surcharge on card payments, capped at CHF 1.50. ATM withdrawals abroad in foreign currency cost CHF 5 per withdrawal, and there is also a hidden 1.25% surcharge on top of the exchange rate, effectively making foreign currency transaction fees around 2.5%.
Compared to other Swiss banks, ZKB's foreign currency payment surcharge of 1.25% is higher than some digital banks like Neon, which charges only 0.35%. However, ZKB's fees are considered quite reasonable for a traditional bank and cheaper than many large Swiss banks that may charge higher fees or impose minimum balances.
Democrats Abroad Switzerland has criticised the measure, labelling it as "incredibly unfair". Meanwhile, UBS charges "the usual fees for private customers" for Switzerland-based US citizens, while Postfinance does not charge any additional fees for foreign customers living in Switzerland.
It's not clear whether ZKB is still accepting new US customers. Some banks demand US tax returns from their US customers under threat of account closure, although this is not required by the US banking law. Banks are only required to report accounts with a balance of over $50,000, yet some banks report all accounts, regardless of the balance.
In response to the criticisms, ZKB stated that existing US customers have become more demanding due to legal and internal compliance requirements. The bank has not disclosed how many customers are affected or the extent of the additional costs mentioned in the letter.
[1] Source: https://www.swissinfo.ch/eng/swiss-banks-charge-more-for-us-customers/45642408 [2] Source: https://www.swissinfo.ch/eng/swiss-banks-face-us-pressure-to-disclose-accounts/45642368
Finance-related costs associated with US regulatory requirements have led to Zürcher Kantonalbank (ZKB) imposing additional fees on American customers living in Switzerland. These fees, totaling 20 francs per month or 360 francs per year, have been communicated to all ZKB customers with a Swiss address and American passport following the bank's recent announcement.
