
A simple guide for anyone who is investing money in the financial market for the first time and needs a custody account. And also for those who are looking for a cheaper custody account with the right conditions for them.
What is a depot?
A securities account is an account that enables you to make purchases and sales on the financial market (in banker’s terms: trading account). You probably already have a private account that receives your salary and from which you make most payments and transfers. You probably also have a savings account, which earns slightly more interest than your private account. However, you cannot buy shares or funds directly into either your private or savings account.
You need your own account for this, the so-called custody account. And it works like this: You transfer money to the clearing account of your custody account, which you can then use to buy investment products such as shares or funds. These investment products are then stored in your custody account: you can see which securities you have bought, at what price, what costs have been incurred (unfortunately often somewhat hidden) and, of course, how your investments are performing – i.e. whether you are making a profit or a loss. When you sell a security, the money is paid out to your custody account. You can now transfer it to another account or reinvest it.
How do I open a custody account?
You can open a securities account with traditional universal banks or with independent providers. These are also called (online) brokers. For some time now, so-called robo-advisors have also been offering investments in ETFs at very reasonable prices. Examples include findependentfinpension, Selma Finance or truewealth. With these, you cannot buy individual securities, but choose from an investment strategy or put together your own individual strategy. The robo-advisor then buys the relevant products and holds them for you in a custody account in your name.
A comparison shows that there are big differences in fees between universal banks and online brokers. Depending on which products you want to invest in, how much money and how often you want to trade, there are cheap and less cheap providers. A comparison is worthwhile because, depending on the provider, you can save several hundred to thousand francs per year. High fees can quickly add up, especially for smaller portfolios.
It is also worth taking a look at the software interface (can I cope with the menu navigation?) and the availability of customer service (is there a hotline number?), especially for beginners. The providers’ sample portfolios are a good way to get a feel for a custody account provider. With a sample portfolio, you can simply pretend to invest with the provider and get to know the application in this way without any real money flowing in the background.
What should I look out for when choosing my custody account provider?
In most cases, maintaining a securities account costs an annual (minimum) fee, even if you do not hold any investments in it. When choosing a provider, you should consider not only the annual custody account fees but also the transaction costs when buying/selling investments. Ultimately, online brokers generally offer more favorable conditions than universal banks.
You pay custody account fees mainly in relation to the value of your custody account. If the value of your shares increases, your fees increase. With some providers, the custody account fees are capped at a certain amount or there is an (additional) fixed amount per position. The annual custody account fee can therefore be charged as a percentage or as a lump sum. There are also variants with or without a minimum fee.
The transaction costs for the purchase or sale of securities consist of dealer fees, stock exchange fees and federal stamp duty.
The bank’s dealer fee (the so-called brokerage fee) is largely determined by the service: So the question is: how do you want to place your orders? Online orders (via e-banking/Internet) are much cheaper than orders placed by telephone or fax. The scale of fees is important here: are there minimum fees, flat purchase fees or does the purchase fee increase as a percentage of the value of the security?
Stock exchange fees. These are comparatively low. Banks can reach individual agreements with the stock exchanges on the level of fees. The exchange fee can therefore differ between providers.
The federal stamp duty is the same for all providers and amounts to 0.15 % for investments with a foreign securities identification number and 0.075 % for investments with a domestic securities identification number (also known as “Valor”). This may be relevant for you when choosing securities, but not when choosing your custody account provider. This is because all providers pass this stamp duty on to you 1:1.
Summary: Find a provider for your custody account
In summary, you should pay attention to the following when choosing a provider: firstly, choose a flat fee for the annual custody account costs. This means that the custody account fee should not increase as a percentage of the custody account value or have an upper limit. Secondly, how can you place your orders? Placing orders online is usually much cheaper (or in other words: there are significant surcharges if you use a different order channel). And thirdly , the brokerage fee should either be a flat rate (as offered by providers for the purchase/sale of ETFs, for example) or the percentage brokerage fee should be low for your typical transaction volume.
However, instead of buying individual shares, funds or ETFs from a custody account provider, the simpler solution for you may be to choose a robo-advisor. These package the costs for investment, custody and rebalancing into a simple and easily comparable annual flat fee. With less than 0.5 %, you are usually on board.
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Use the voucher code Smolio when opening an account and have your first 3,000 francs managed free of charge for life. How to get the discount: enter the voucher code Smolio when opening an account and deposit 500 francs or more.
Notice
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Last update: 09.12.2024 20:52