UBS announced that it will charge clients negative interest from July 2021 if cash balances exceed CHF 250’000. Many other banks have followed suit and are also charging negative interest on CHF and EUR cash balances. This measure is dictated by current money market rates, which are severely negative as demonstrated in Chart 1 for EUR rates.
Institutional and corporate clients with cash deposits in Swiss francs have already been bearing the cost for several years. Now, individual and business customers experience the same penalty.
More information on Liquidity Management.