Negative interest on savings accounts remains a sensitive issue in Switzerland and most banks shy away from imposing charges for the less-wealthy among their clients. A study now shows that savers in fact have been through much tougher times in the past century.
Moneyland.ch has looked into the swings of the interest curve on savings accounts since 1933. The online comparison provider now concluded that the interest on such accounts today is at an all-time low – but only if inflation is taken out of the equation. When inflation is taken into account, savers have seen far worse times.
From 1933 through 2019, savers had to contend with negative real interest for 36 years, while receiving a positive interest in 51 of the years Moneyland.ch had looked into. The real interest rate on average was 0.07 percent a year over the 87-year period. The historic low of the savings account interest was reached in 2019 with 0.04 percent.
The Difficult War-Years
However, since 1933, numerous years yielded a real interest far below today's rate. The lowest was reached with about minus 11 percent in 1941. The biggest plus was achieved in 1933, when a substantial deflation pushed real interest to a high of 5.4 percent.
If a saver had put aside 1,000 Swiss francs ($1,087) in 1933, he would have generated a total interest of a paltry 63 francs over all those years. If the same investor however had put his money into Swiss stocks, he would have made an inflation-adjusted profit of more than 130,000 francs.
