The Swiss Banking Act of 1934 made it criminal for Swiss banks to disclose the name of an account holder. Similar to the confidentiality protections between doctors and patients or lawyers and their clients, these protections are the primary reason that Swiss bank accounts are so popular with wealthy banking customers around the world.

Opening a Swiss Bank Account

Surprisingly, opening a Swiss bank account is not that much different from opening a standard bank account. You have to fill out forms and provide documentation that proves who you are and what you do. However, due to some special circumstances regarding privacy, the level of scrutiny over providing official documentation of your identity is more strict. For example, you may need to show your official passport to provide your identity, whereas a driver's license would probably suffice in the U.S.

There are also different minimum balance requirements depending on the type of account you want. These can range from a few thousand dollars to millions of dollars.

Swiss Bank Accounts and Nonresidents of Switzerland

Nonresidents of Switzerland must be at least 18 years old to open a Swiss bank account, and that's about the only restriction. Account holders can choose their currency—most hold their funds in Swiss francs, U.S. dollars, euros, or British Pound Sterling.

There's usually no minimum balance required to open an account, but once an account holder deposits funds, there is typically a minimum balance requirement, which varies according to the bank. If you don't have that much idle cash, you might be better off looking for the best savings accounts in your own country.

Swiss anti-money-laundering laws require a prospective Swiss bank account holder to provide several documents to open an account. These include authenticated copies of your passport and documents explaining your profession, such as tax returns, company documents, professional licenses, etc.; proof of the source of your funds; and other typical personal information.

Benefits of Swiss Bank Accounts

Some benefits of Swiss bank accounts are the low levels of financial risk and high levels of privacy. The Swiss economy has been known to be very stable, and the country has not been part of any major conflicts for some time. Furthermore, Swiss law requires that banks have high capital requirements and strong depositor protection, which protects deposits from financial crises and conflicts.

Accounts held in Swiss Francs will earn a small amount of interest, but they'll also have to pay the Swiss withholding tax. For this reason, most foreign account holders have their Swiss bank account in another currency.

Swiss law states that the bank can't disclose any information regarding an account (even its existence) without the depositor's permission. The only way information will be revealed is if a government agency says that a depositor is involved in a criminal act or some other financial issue (like bankruptcies, divorces, or inheritances). Furthermore, Swiss anti-money-laundering regulations also require depositors to provide proof regarding the origin of the funds they are placing in their accounts.

The Bottom Line

Popular culture has made Swiss banks synonymous with espionage and hidden wealth. While the country's banking secrecy laws still afford a high degree of privacy, strict anti-money laundering laws make the country a much less practical haven for ill-gotten wealth. Anyone over 18 is free to open a Swiss bank account, provided that they can provide identity documents and demonstrate the source of their wealth.