After Strong SNB Hikes, Swissquote Brings Back Interest on Trading Accounts?

Thursday, 27/04/2023 | 08:05 GMT by Damian Chmiel
  • Traders can earn interest of up to 0.5% on their cash deposits in three currencies.
  • The brokerage's offer has no restrictions or maintenance fees.
Swissquote

Swissquote has announced that in response to changes in interest rates in Switzerland and other European countries, it will once again offer interest on trading accounts. The service will be effective from 1 May 2023 and will apply to USD, EUR, and CHF deposits, offering up to 0.5% in passive income.

Interests in Swissquote Are Back

According to information released by Swissquote on Thursday, the offer does not have any age restrictions or withdrawal limitations, nor does the institution impose any maintenance fees. Interest will be accrued for every client, regardless of the size of their deposit. However, as expected, clients with the largest deposits can anticipate the highest annual interest rates.

Interest rates for deposits up to CHF 200,000 will be 0.1%, 0.25% for deposits up to CHF 500,000, and 0.5% for deposits exceeding this amount.

"Our offer is very attractive and brings back a sense of market normality after a long period of zero interest rates," Marc Bürki, the CEO of Swissquote, commented. "The interest on trading accounts allows to generate passive income again without having to commit in terms of time, notice periods or withdrawal limits, as is the case with savings accounts."

Interest rates in Switzerland are among the lowest in the world and have been at a negative level of 0.75% since 2015. In 2022, when the Swiss National Bank (SNB) started raising interest rates along with other central banks worldwide, the deposit rate reached 1.5%, which is the highest level since the great financial crisis of 2008.

Swissquote is not the first retail trading company that offered interest on uninvested cash to retail traders. A few weeks ago, the Amsterdam-based BUX announced a similar move and is now offering 2.01% to BUX Zero customers. Although the interest rate is significantly higher than Swissquote's offer, it is time-restricted and provided only to traders with cash balances below EUR 25,000.

Swissquote 2022 Report and CySEC License

Recently, Swissquote released its annual report for 2022, revealing a net revenue of CHF 408 million and a pre-tax profit of CHF 186.4 million, in line with the previously estimated figures. However, these figures represent a decline of 13.6% and 16.5%, respectively, from the previous year's peak.

Despite the decline in revenue, pre-tax profit only dropped slightly to 45.7% from 47.3%, while net profits decreased 18.6% to CHF 157.4 million with a profit margin of 38.6%, which is down from 40.9%.

Nevertheless, Swissquote is optimistic about its performance in the current year, despite a sluggish market in 2022. The company is aiming for an increase of 21% in net revenue to CHF 495 million and a gain of 23% in pre-tax profit to CHF 230 million for 2023.

In a separate announcement in December 2022, the Switzerland-based forex and CFDs broker disclosed that it had acquired a new operational license from the Cyprus Securities and Exchange Commission, enabling it to expand its operations in Europe.

Swissquote has announced that in response to changes in interest rates in Switzerland and other European countries, it will once again offer interest on trading accounts. The service will be effective from 1 May 2023 and will apply to USD, EUR, and CHF deposits, offering up to 0.5% in passive income.

Interests in Swissquote Are Back

According to information released by Swissquote on Thursday, the offer does not have any age restrictions or withdrawal limitations, nor does the institution impose any maintenance fees. Interest will be accrued for every client, regardless of the size of their deposit. However, as expected, clients with the largest deposits can anticipate the highest annual interest rates.

Interest rates for deposits up to CHF 200,000 will be 0.1%, 0.25% for deposits up to CHF 500,000, and 0.5% for deposits exceeding this amount.

"Our offer is very attractive and brings back a sense of market normality after a long period of zero interest rates," Marc Bürki, the CEO of Swissquote, commented. "The interest on trading accounts allows to generate passive income again without having to commit in terms of time, notice periods or withdrawal limits, as is the case with savings accounts."

Interest rates in Switzerland are among the lowest in the world and have been at a negative level of 0.75% since 2015. In 2022, when the Swiss National Bank (SNB) started raising interest rates along with other central banks worldwide, the deposit rate reached 1.5%, which is the highest level since the great financial crisis of 2008.

Swissquote is not the first retail trading company that offered interest on uninvested cash to retail traders. A few weeks ago, the Amsterdam-based BUX announced a similar move and is now offering 2.01% to BUX Zero customers. Although the interest rate is significantly higher than Swissquote's offer, it is time-restricted and provided only to traders with cash balances below EUR 25,000.

Swissquote 2022 Report and CySEC License

Recently, Swissquote released its annual report for 2022, revealing a net revenue of CHF 408 million and a pre-tax profit of CHF 186.4 million, in line with the previously estimated figures. However, these figures represent a decline of 13.6% and 16.5%, respectively, from the previous year's peak.

Despite the decline in revenue, pre-tax profit only dropped slightly to 45.7% from 47.3%, while net profits decreased 18.6% to CHF 157.4 million with a profit margin of 38.6%, which is down from 40.9%.

Nevertheless, Swissquote is optimistic about its performance in the current year, despite a sluggish market in 2022. The company is aiming for an increase of 21% in net revenue to CHF 495 million and a gain of 23% in pre-tax profit to CHF 230 million for 2023.

In a separate announcement in December 2022, the Switzerland-based forex and CFDs broker disclosed that it had acquired a new operational license from the Cyprus Securities and Exchange Commission, enabling it to expand its operations in Europe.

About the Author: Damian Chmiel
Damian Chmiel
  • 1521 Articles
  • 33 Followers
About the Author: Damian Chmiel
Damian's adventure with financial markets began at the Cracow University of Economics, where he obtained his MA in finance and accounting. Starting from the retail trader perspective, he collaborated with brokerage houses and financial portals in Poland as an independent editor and content manager. His adventure with Finance Magnates began in 2016, where he is working as a business intelligence analyst.
  • 1521 Articles
  • 33 Followers

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