Exchanging Swiss francs for euros: 5 mistakes to avoid

#1 Transfer your CHF to France directly from your Swiss bank account

Some of you have probably already tried transferring your Swiss francs directly into your French euro account. Whilst this may seem the simplest and quickest option, it isn’t always the best solution.

Transferring CHF to your EUR account involves making an expensive international transfer. As a reminder, an international transfer involves transferring funds from a bank account in one country to a bank account in another country. This can be done between bank accounts held in the same currency or in different currencies.

If you wish to transfer your Swiss francs from a Swiss bank to a euro account at a French bank, the international transfer will involve a currency conversion, as the currency of the transfer is not the same as that of the recipient account. Your bank in France will automatically convert your Swiss francs into euros upon receipt of the funds. This will therefore incur currency conversion fees that are beyond your control, and you are likely to be offered an unfavourable CHF/EUR exchange rate.

However, with an online currency exchange service such as b-sharpe, the transaction will be processed at the best rates, regardless of the destination. Once your bank transfer in Swiss francs has been made, the funds will be credited to your French bank account within two working days on average.

#2 Choosing a bank because it operates in Switzerland and another country

The argument for an international presence carries significant weight when looking for a CHF–EUR currency exchange solution.

However, the physical location of your bank comes at a cost that inevitably affects other overburdened services such as:

• credit card;
• the exchange rate margin;
• account maintenance fees;
• and many other committees.

This conversion, which might seem free, actually involves very real costs. And as these institutions do not disclose their exchange rate margins, it is impossible to quantify the actual financial benefit to you.

#3 Using a bank for CHF-EUR currency exchange

As currency exchange specialists based in Geneva, we have realised that your needs and expectations are not being met by banks that generate more than 25% of their profits from foreign exchange transactions.

Nowadays, banks are no longer able to offer truly competitive and transparent services to their foreign exchange customers. Currency exchange bureaux, for their part, have their own limitations.

Your bank may charge a spread of up to 1.65% (compared with just 0.50% at b-sharpe), not to mention currency conversion fees and the fact that the availability of advisors can leave something to be desired.

Whether you’re an individual or a business, our team of foreign exchange and trading specialists is on hand to answer your questions via chat, phone or email.

#4 Repaying your mortgage in foreign currency and exchanging currency through your bank

You don’t have to go through your bank for currency exchange when repaying a mortgage. As with any other currency exchange transaction, online currency exchange services can be advantageous.

Once your flat has been sold, if your mortgage is denominated in a foreign currency (and secured by a deposit), the proceeds of the sale (in euros) will be paid into a euro-denominated account.

From there, b-sharpe converts the euros into Swiss francs and transfers the Swiss francs to your account, so that you can repay the loan to your bank.

#5 Trading on margin as a private individual

On the face of it, a forward sale might seem like a good idea: every month, your bank buys Swiss francs on your behalf and converts them into euros at a rate fixed in advance for a set period (from 3 to 12 months). You know exactly how much your budget will be, regardless of exchange rate fluctuations or economic upheavals resulting from potential political changes.

However, security comes at a high cost: the bank charges you for the absence of exchange rate risk offered by forward contracts via a substantial margin, on top of the administrative fees. The cost of this protection is built into the contract through a fixed exchange rate that is not particularly favourable compared to the rate you would get if you carried out your foreign exchange transaction on a spot basis.  

When the unexpected happens, a forward sale is not synonymous with flexibility. An unforeseen event, such as the termination of your employment contract, can bring an end to the forward sale agreement you have entered into with your bank. The early termination of such an agreement generally entails high costs.

Fair enough, you might say? Yes and no. What about the penalties that apply if you decide to terminate the contract? The further the exchange rate on the date the contract is terminated (or spot rate) is from the forward rate, the higher the penalties will be.