HOW TO OPEN A TAX-FREE SWISS MONEY MARKET ACCOUNT
A new brand new product, BankSwiss, is an
attractive alternative to the conventional Swiss
savings account. Interest rates are higher and
earnings are free of the 35% Swiss withholding tax.
Earnings accumulate tax free since, technically, your
capital is pooled into liquidity funds (money market
funds). Being linked directly to short-term money
market rates, higher yields can be achieved.
You can add funds to BankSwiss at your discretion,
make withdrawals when required -- even issue payment
instructions without any restrictions.
The minimum to open a BankSwiss account is U.S.
$10,000 or the equivalent in another currency. With a
BankSwiss account of U.S. $50,000 or more (or
equivalent in another currency) you may obtain an
international credit card. For your purchases or for
your cash withdrawals via ATM (Automatic Teller
Machine), you always have easy access to your funds.
Any payments or withdrawals are simply charged to your
BankSwiss account.
For the investor wishing to establish a Swiss bank
base as a precaution for the future, or springboard for
other international investments, BANKSWISS is the
lucrative choice.
Available in 4 major currencies
Traditionally, Switzerland has a global
orientation and it comes as no surprise that you can
find the world's most flexible and internationally-
oriented investments in this country. BankSwiss is no
exception. In order to accommodate the growing number
of international clients, BankSwiss is available in 4
major currencies: Swiss francs (SFR), Deutsche Marks
(DEM), U.S. dollars (U.S.$), and European Currency Unit
(ECU). You can open your BankSwiss in any or several
of these currencies at your discretion and, in
addition, you can switch the denomination of your
BankSwiss at any time, investing in the currency you
deem most favorable.
BankSwiss in Swiss francs:
For the investor seeking a long-term store of
value for his Swiss "nest-egg", we recommend that
BankSwiss be held in Swiss francs. The Swiss franc is
the world's premier currency -- long-term and worth its
weight in gold. Calculated at market value,
Switzerland's gold reserves equal more than 200% of all
Swiss francs in circulation. The Swiss franc has
retained more of its purchasing power than any other
currency over the years. Since the present system of
"floating" exchange rates was introduced in 1973, the
Swiss franc has appreciated in terms of every major
currency in the world. For example, from year-end 1969
when exchange rates were still fixed by the "Bretton
Woods" system, through two decades of freely floating
exchange rates until year-end 1992, the exchange value
of the Swiss franc against the U.S. dollar tripled in
value. Thus, an American holding francs for that
period would have achieved a gain that offset nearly
three-fourths of the dollar's gain that offset nearly
three-fourths of the dollar's loss of purchasing power,
even before taking into account any acquired interest
on his Swiss franc balances.
In the end, the historical strength of the Swiss
franc against the dollar stems primarily from the Swiss
peoples' demonstrated desire and ability to follow
relatively sound policies, and to deviate from these
only reluctantly and temporarily. In contrast, U.S.
and other foreign policy makers have shown growing
appetite for policies that promote inflation. Until we
see evidence that these fundamentally different
approaches have changed, we expect that in the long run
the Swiss franc will appreciate further, although this
trend may continue to be interrupted by short-term
reversals.
While the Swiss franc is certainly the
international investor's first choice due to its long-
term strength against all other currencies, short-term
gains may be achieved in one of the other available
currencies. Currency exchange rates fluctuate from day
to day. In many cases, however, a strong trend in a
particular currency becomes visible, and for the more
active investor, the currency switch option can be used
to further optimize return. Should a clear trend
appear in any of the available currencies, you simply
instruct the bank to change the denomination of your
account. Whereas BankSwiss is not a spot market
foreign exchange account, it gives you the opportunity
to profit, at your discretion, from strong market
trends if an when they appear.
Outlook for the Deutsche Mark (DEM):
The Deutsche Mark is the power horse of the
European Community's economy. The DEM offers a
slightly higher interest rate than the Swiss franc and
historically has topped the U.S. dollar as well --
albeit not to the same degree as the Swiss franc. In
turn, this diminishes the minimal interest rate
advantage the DEM has over the Swiss franc. Therefore,
the reasoning behind a German mark denominated account
would be a belief in the DEM's potential strength
within Europe and a long-term increase in its value.
However, it would be wise to consider the consequences
the enormous costs of the East-West reunification
process is having on the DEM. While Germany is not
losing its dominant position within Europe, the effects
may cause the DEM to lose some of its attractiveness.
Outlook for the U.S. dollar (U.S.$):
The U.S. dollar is still the world's reserve
currency although its dominance has substantially waned
since the mid 1970's. Its share of foreign exchange
reserves has fallen from 80% to 52%; the number of
countries that peg their currencies to the dollar has
come down by half, to 24. Even so, some 50% of all
private-sector wealth held in foreign currencies as
bank deposits and securities is still in U.S. dollars!
As a reserve currency, the dollar is supposed to be a
reliable store of value, yet successive American
governments have failed to fulfil this role. Until the
early 1980s, America continued to boast the largest net
foreign assets in the world. A decade of massive
current account deficits however, has turned American
into the world's largest debtor. As such, the
government may be tempted to allow inflation to nibble
away at the real value of its debt and use devaluation
to reduce its external deficit. Hardly desirable
properties for a reserve currency.
Outlook for the European Currency Unit (ECU):
The European Community's total GDP is larger than
America's. It is a net foreign creditor and the
world's biggest exporter. It will be home to the
world's largest unified financial market. Today, the
ECU is going thorough a stage of "growing pains: and
further turmoil would not be surprising. The higher
interest rate the ECU offers may be tempting for
investors expecting a growing European role in world
economics.
Whichever currency you choose, remember, higher
interest rates are always accompanied by higher risk.
Taking all factors into consideration, it is hard to
beat the traditional strength and security of
Switzerland and the Swiss franc.
Optional international investment opportunities
Diversifying assets across a spectrum of different
types of investments is a well-known and long-practiced
strategy. Today private investors around the world are
increasingly demanding international diversification in
order to preserve wealth, optimize gains and minimize
risk.
BankSwiss also may serve as a springboard for
global investment opportunities and is the best place
to start or broaden your international investment
strategy.
With BankSwiss you can switch your investment into
global funds, or going a step further, you can invest
your capital in any other specific investment you
choose. For example, should the time be right for
stocks, you can purchase them with BankSwiss or should
you be interested in precious metals, you can invest in
them as well. Should you sell your stocks or precious
metals, BankSwiss serves as a "parking lot" -- storing
liquidity safely and profitably for possible future
investment opportunities. Your funds won't lie
stagnant but will continue to earn interest yet remain
immediately available to you at all times. BankSwiss
is an investment vehicle with almost boundless
investment opportunities -- a single account for all
seasons.
You will receive semi-annual BankSwiss account
statements including an investment advisory report,
produced by Swiss banking professionals. This
information will assist you to structure your global
asset allocation should you decide to take BankSwiss a
step further, namely to enhance the profit potential by
investing in global, specialized funds or securities.
Unmatched safety
BankSwiss is a product of UeberseeBank, a mid-
sized Swiss investment bank in the heart of Zurich's
banking district. Established in 1965, UeberseeBank
specializes in securities accounts management and
investment counselling for an international clientele
with over 14,000 clients and client assets of over 4
billion Swiss francs under management. Renowned for
its innovative investment accounts for foreign
investors, UeberseeBank takes pride in its exemplary
customer service.
UeberseeBank is a 100% subsidiary of the American
International Group (AIG), a AAA-rated international
insurance group with headquarters in New York. AIG has
over 35,000 employees in more than 130 countries
worldwide.
Fees are clear cut and tightly calculated
With many other bank accounts, your earnings are
literally gobbled up by all forms of charges and fees.
Not so with BankSwiss. A one-time premium is deducted
from the amount invested when opening your account and
a low annual account running fee is charged as follows:
_________________________________________________________________
Amount of Account Opening Annual Account
Investment Costs Running Fee
(in Swiss (in % of (in % of relevant
francs) total portion of average
payment invested capital)
_________________________________________________________________
Up to 199,999 2.00 0.4
200,000 - 499,999 1.50 0.4
500,000 - 999,999 1.00 0.3
1,000,000 - 1,499,999 0.50 0.2
1,500,000 - 4,999,999 0.50 0.1
5,000,000 and more 0.25 0.1
_________________________________________________________________
Otherwise, BankSwiss runs expense-free, no other
costs will be deducted from your account and all currency
switches are free of charge.
