New! We have created a special website about Swiss bank accounts with hundreds of pages of information. Micheloud & Cie, a well-known Swiss firm, owns both websites. Click to visit www.swiss-bank-accounts.com

The yearly return depends on the currency of the money market fund. After a boom in the early 1990s, returns suffered a strong decrease due to the drop in interest rates. These funds are becoming interesting again. The average yearly return (1994-1999) for the funds in a major Swiss bank was 3.5% in EUR, 5.1% in USD and 5.8% in GBP. (These figures are given for information purposes only and are not an offer, see our disclaimer.)

This type of investment is extremely low-risk and very liquid, meaning that you can change it into cash assets at any time. Each night, at the close, the net value of the holdings list is determined. Any increase in fund value is immediately reflected in a value increase to your share. You can thus leave the fund at any time and generate your appreciation. The purchase of a share costs 0.35% of the invested amount (commission on share issues). Within one month, you will have thus amortized your buying costs. The investment is profitable starting at approximately $5,000.
The only inconvenience is the fact that it is not suited to managing liquid assets on a very short-term basis. If you part with your shares less than a month after having purchased them, you will have played more fees than what you gained in dividends. On the other hand, after one month of activity, this instrument offers nothing but advantages. Besides, even without management authorization, bankers acting in the client's interest place any cash left on an account in a money market fund. It's important to understand that it is not in the bank's (financial) interest that you invest your money, since they could do that on their own if you decided to leave it on your account. It's by pure professionalism that the banker urges you to invest your money, so that you don't miss out on any interest that you could have earned had the money been invested.

This type of investment is particularly suited to people who are looking to yield a return, but who do not want to take risks and who want to be able to withdraw at any time in case of need. The majority of the funds are relatively small (around 1,000 CHF), so that even small amounts can be invested - which isn't the case with other investment funds.

Advantages:

• Investment possibilities in most currencies
• No advance taxes
• Very liquid
• Very safe
• Returns are based on the interest rates in effect on the monetary market.

Inconvenience:

• Not profitable in the very short-term (less than one month)