Postfinance imposes negative interest rates of 3 percent on account balances of several large customers – starting from CHF 100,000

Postfinance is causing a stir with its high negative interest rates. The portal "Inside Paradeplatz" published a letter from the financial services provider to a customer in an article on Friday, informing the customer that, starting November 1 of this year, Postfinance will be charging a 3 percent fee on their account balances – starting at a threshold of CHF 100,000. The terms apply "to the sum of all your accounts in Swiss francs," the article stated. Future changes to the threshold and the fee are "possible at any time."

A spokeswoman for the financial institution confirmed that the letter is authentic. However, it was sent to a major customer and concerns an individually determined threshold. Private customers are not affected by the fee. Since the middle of the year, such letters have been sent in stages to "a few hundred major customers." The Swiss Post financial services provider claims to have 2.4 million private and business customers .

The spokesperson added that the affected customers were selected, among other things, "after a careful review of their individual circumstances." She did not provide further details on the selection process. Among these individual major Postfinance customers are pension funds.

This is likely due to increased pressure on Postfinance's interest rate differential business due to very low interest rates. The uncertain geopolitical environment and fluctuations in the financial markets could also play a role.

"Zero interest rates, as currently set by the Swiss National Bank, are a difficult environment for banks," says Andreas Dietrich, a finance professor at the Lucerne University of Applied Sciences and Arts. Some financial institutions are already charging large clients negative interest rates again, even though this is highly unpopular. However, he considers a negative interest rate of 3 percent for account balances of CHF 100,000 or more to be a "very harsh measure."

It can't be Postfinance's goal to get rid of wealthy customers, says Dietrich. Rather, the financial institution probably wants to push these customers more into its investment business. Postfinance makes money with investment products – but if customers leave cash lying around in their accounts, that's not the case. Ultimately, Postfinance is heavily involved in the retail customer segment, and these customers often have lower average assets.

"Postfinance has to make money, which they're currently practically unable to do in the interest rate differential business," says Dietrich. Consequently, they need to push their investment business. The fact that Postfinance isn't allowed to grant loans may also play a role in this.

According to the Postfinance spokesperson, Postfinance is not pursuing "profitability" with these fees. Rather, the goal is to actively manage the impact of large deposits on the balance sheet while simultaneously complying with the prescribed regulatory requirements. Postfinance is obligated to do so as a systemically important bank. The financial institution will continue to do everything in its power to protect its private customers from deposit fees or negative interest rates, she continued.

However, criticism is coming from the pensions sector, especially since pension funds are also affected by the changes at Postfinance. "Pension funds – while fully understanding the regulatory requirements of banks – are dependent on keeping a portion of their insured members' savings liquid," says Lukas Müller-Brunner, Director of the Pension Fund Association (ASIP).

The pension funds simply cannot avoid maintaining a minimum level of liquidity. Not only are contributions transferred to the pension fund in Swiss francs and centimes, but the fund also pays pensions, lump sum payments, or benefits when the insured person transfers to another pension fund in this form. "A pension fund cannot pay pensions in shares," says Müller-Brunner.