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Securities account in Switzerland: the foundation of a successful investment strategy
A securities account is essential for anyone looking to invest on the Swiss stock exchange. It is a dedicated account for holding securities such as shares, bonds or investment funds. Without one, trading securities is virtually impossible. If you wish to invest in stocks, for example, you will first need to open a securities account.
What is a securities account and how does it work?
A securities account (also known as a securities custody account) is used for the secure holding and management of securities. In simple terms, it is a digital container where your purchased securities are recorded.
Instead of keeping physical certificates at home, your investments are held electronically in your bank or financial institution’s custody. This account allows you to buy and sell securities, making it a prerequisite for stock market trading.
A securities account is always linked to a reference account (settlement account). This account is used to process transactions: when you buy stocks, the corresponding amount is debited from the settlement account, and when you sell, the proceeds are credited back. Dividends and interest payments are also deposited into this account.
In Switzerland, strict legal regulations govern the management of securities accounts, which include the Federal Act on Banks and Savings Banks (Banking Act) and the Federal Act on Intermediated Securities. These regulations ensure that securities remain the investor’s property and are particularly well protected in the event of a bank failure. This makes a securities account a secure and indispensable foundation for investments.
What types of securities can be held in an account?
A securities account allows you to store and trade various investment instruments, including:
Shares: Equity stakes in companies traded on stock exchanges
Bonds: Fixed-income securities issued by companies or governments
Funds and ETFs: Shares in investment funds, including exchange-traded funds (ETFs)
Structured products: Certificates or structured bonds with derivative components
Derivatives: Depending on the provider, these may include warrants or options
Precious metals: Many banks also allow custody of precious metal holdings, such as gold in securities form
Fees for securities accounts in Switzerland
If you are opening a securities account, it is important to understand the fees involved, as they vary widely between providers and have a direct impact on your net returns. Typical charges include:
Custody fees: These are fees for storing securities and are charged quarterly or annually. Traditional banks usually apply a percentage of the account’s total value per year (typically between 0.2% and 0.5%), often with minimum fees per position. Additional charges may apply for foreign securities (around 0.1 to 0.2 percentage points more). Some cantonal banks impose minimum fees per security position. Alternatively, some providers offer flat-rate models with fixed fees.
Transaction fees (brokerage fees): These are charges for every buy or sell order. The fee is typically based on trade volume and the stock exchange used. Traditional banks often apply tiered pricing—a base fee plus a percentage of the transaction volume. Online brokers, on the other hand, tend to offer lower flat-rate fees per trade. Additional third-party fees may also apply, including stock exchange fees and Swiss federal stamp duty (0.075% on Swiss securities, 0.15% on foreign securities per transaction). These statutory charges apply to all securities transactions processed through a Swiss-based broker. Even small fees can add up significantly over multiple transactions, so if you trade frequently, it is especially important to compare brokerage costs.
Depending on the provider, additional fees may include:
Foreign exchange fees when purchasing securities in foreign currencies (often embedded in the exchange rate markup)
Custody fees for external depositories for exotic securities that require special storage
Charges for special services, such as physical share certificates, detailed tax statements or exercising subscription rights in capital increases
Inactivity fees for extended periods without trading
Transfer fees per position when moving your account to another bank
A cost comparison between providers is well worth it. Online brokers are generally cheaper, offering lower custody fees and brokerage charges. If you rarely switch accounts, choosing the right fee structure can save you significant amounts over time.
Common mistakes with securities accounts and how to avoid them
Managing a securities account comes with some common pitfalls, many of which can be avoided with knowledge and discipline. Below are three frequent mistakes and how to prevent them:
Lack of diversification
One of the most common mistakes among account holders is insufficient diversification. Many securities accounts carry a high concentration risk—too much investment in a single stock, industry or market. Inexperienced investors often allocate a large portion of their capital to a few Swiss stocks or a single sector fund. This lack of diversification can lead to significant losses if prices drop.
High fees
Many investors underestimate the long-term impact of fees on their returns. Expensive banks and frequent trading can significantly erode investment gains. Yet, many hesitate to compare providers or stay with their primary bank out of convenience, even when cheaper alternatives exist.
Misjudging risk
Many investors miscalculate the risk levels of their investments. Some take on higher risks than they can reasonably afford, whether out of ignorance or a desire for quick gains. Complex structured products or alternative investments are often perceived as less risky than they actually are. In some cases, investors hold a higher equity proportion in their portfolio than is suitable for their risk tolerance. This can lead to major losses in market downturns and trigger panic selling.
Best practices for managing your securities account
A successful securities account requires active monitoring and careful organisation. Here are some best practices for private investors in Switzerland:
Regularly review your investment strategy
Check your portfolio once or twice a year or whenever significant changes occur in your personal circumstances or the markets. Ensure that your asset allocation (distribution across stocks, bonds and funds) still aligns with your financial goals and risk tolerance.
Studies show that around 70% of investment success depends on asset allocation across different investment classes. Finding the right mix is more important than selecting individual top stocks.
Make use of digital tools
Take advantage of technology to efficiently manage your portfolio. Swiss banks offer e-banking platforms and mobile apps that provide real-time access to your account, balance updates and performance tracking.
These apps often include features such as price alerts, watchlists and graphical portfolio analyses. Additionally, independent finance apps and portfolio trackers allow consolidated monitoring of multiple accounts.
Seek professional advice
Even if you make your own investment decisions, a second opinion from an expert can be invaluable. Many Swiss investors combine independent investing with occasional professional advice.
Financial professionals—either through your bank or independently—can help with major decisions, develop tailored investment strategies, select suitable products and assess your risk profile. Good advisors can prevent impulsive actions and help you avoid common mistakes.
Stay informed
Keep yourself updated and continue learning. The financial world is constantly evolving with new products, regulatory changes and shifting economic conditions. Use financial news portals, bank newsletters or independent investment guides. With better understanding, you can manage your securities account more confidently and make well-informed decisions.
Conclusion: the securities account as the foundation of successful investments
A securities account is the cornerstone of stock market investing in Switzerland. Given the significant differences in fees and services across providers, a thorough comparison is essential. A well-diversified portfolio, regular reviews and cost awareness will help you maximise your investment potential. Careful account management is the key to long-term investment success.
