How Swiss Bank Accounts Work

Facade of Swiss bank with Swiss flag, Bank Building of Credit Suisse, Bahnhofstrasse, Zurich, Canton of Zurich, Switzerland
••• altrendo travel / Getty Images

Swiss banks have a reputation for anonymity and safety, and for the most part, those features still exist. But foreigners who use private banking services should know that things have changed in recent years. Swiss banks are hesitant to work with overseas customers, and the days of top-secret accounts are over.

Still, U.S. citizens might benefit from using Swiss bank accounts. Switzerland is a global powerhouse in wealth management. Plus, the nation offers economic and political stability that doesn’t depend on the ability to serve as a tax haven, and it's possible to structure accounts in a way that discourages others from going after your assets.

Swiss Bank Account Privacy

Swiss banks have a long history of keeping account information private. After the arrest of two employees of a leading Swiss bank in 1932, Switzerland passed the Banking Act of 1934. Bankers who release information about private clients or acknowledge the existence of client accounts face criminal charges. Over time, Swiss banks have been used to hide Nazi wealth, protect assets of the persecuted, and help countless others keep a low profile.

Not the Same as Secrecy

Privacy has limits. Swiss banks now cooperate with tax and criminal investigations, turning over information that accounts holders might wish to conceal from others.

Numbered Accounts

The strongest privacy comes from numbered accounts, which are identified internally by a number (instead of using the account holder’s name). However, numbered accounts are not anonymous—you need to provide identifying information to open an account, and select staff members have access to the real names behind numbered accounts. Numbered accounts simply limit who knows about your account and who can find it.

Benefits of Privacy

Even if you’re a law-abiding citizen, you may appreciate additional layers of privacy. Wealthy individuals may want to stay under the radar to avoid flimsy lawsuits, becoming kidnapping targets, or other unwanted attention.


While Swiss accounts are not what they used to be, Switzerland is known for additional services, like vaults for storing gold and other valuables. Those arrangements do not feature the same disclosure and information-sharing requirements as bank accounts, but they have unique risks.

Information Sharing

Historically, Swiss bank accounts were used for shielding assets from law enforcement, creditors, and tax authorities. Supervillains in movies use Swiss accounts to accept payments by wire and stay under the radar. But asset protection doesn’t exist if you do anything that Swiss law recognizes as illegal.

Cross-Border Cooperation

Swiss banks face criticism and pressure to cooperate with foreign governments interested in tax revenues, fighting terrorism, and reducing fraud. As a result, banks provide information about clients in numerous situations, including criminal allegations, tax investigations, and divorce proceedings. While it may be possible to hide assets overseas, it’s likely illegal to do so, and it’s increasingly hard to get away with.

FATCA Agreement

Tax evasion is especially hard to pull off as a result of the Foreign Account Tax Compliance Act (FATCA). FACTA is U.S. law, but Swiss banks have agreed to share information about U.S. account holders, no doubt persuaded by stiff sanctions for non-compliance. It’s not illegal to hold assets overseas, but U.S. taxpayers are required to declare those accounts, which may lead to tax liabilities. If you don’t disclose the existence of the accounts, your bank may do it for you.

Creditor Protection

Most U.S. citizens do not get significant creditor protection from simply owning Swiss bank accounts. Swiss banks cooperate with civil and criminal judgments, making them virtually useless for avoiding legal penalties, laundering money, or hiding stolen funds where judgments come from U.S. courts. 

Still, it's possible to add layers of protection and shield assets from creditors without hiding assets or breaking the law. Victor J. Medina, CFP, an estate planning attorney and financial planner focusing on asset protection, says individuals can add protection by holding assets in entities like trusts and LLCs located in non-U.S. jurisdictions, which would require obtaining judgments in those specific jurisdictions.

But it's not a bulletproof strategy. "You have to avoid running afoul of the fraudulent conveyance rules, and, at some point," says Medina, "the value of the claim is worth the cost of the litigation to get judgments enforced in those remote jurisdictions." In other words, motivated claimants with deep pockets can overcome hurdles. Residents of nations prone to groundless seizures or unfair systems are more likely to benefit from creditor protection in Swiss accounts.

How to Open a Swiss Bank Account

If you understand the limitations and you still want to proceed, be prepared for a long process. You’re not opening an online bank account—this task will result in hundreds of pages of paperwork (much of it on the bank’s end) and numerous hours of labor.

Prepare Documentation

Because of increased scrutiny and potential penalties, Swiss banks have strict procedures for due diligence on customers before opening accounts. In addition to valid identification, such as a passport, you’ll need to document the sources of your wealth. Private bankers need to understand how you earn income and where your money came from. For large deposits (from selling a property or business, for example), you may need to provide bank statements and copies of agreements that document the source of funds.

Apply for the Account

The goal is to ensure that banks know who their customer is and where the money comes from. That said, don’t make a trip to Switzerland hoping to just walk into a bank and apply—do research and start the conversation long before you need to open an account. Be mindful of the challenges that arise when working with U.S. citizens, such as the financial risk for the bank, regulatory burdens, and paperwork. Be prepared to hear “no.” Your chances for approval are probably best if you're working with an experienced team that has done this before and has relationships in Switzerland.

Using the Account

Most foreigners don’t use Swiss banks for everyday accounts. You may get debit and credit cards for spending, but the main benefits of private Swiss accounts are the stability of the banking system and privacy. If you use debit cards or write checks in public, you’re letting the world know that you have funds in a Swiss bank account, eliminating much of the privacy you worked so hard for.

Important Information

Before moving assets to an overseas account, investigate local factors such as the current political environment, relevant laws, currency stability, and other issues. Speak with a tax attorney to understand your obligations as a U.S. taxpayer.

Article Sources

  1. OpenEdition Books. "2. The Implications of the SWIFT Affair for Switzerland." Accessed Sept. 8, 2020.

  2. CiteSeerX. "Swiss Banking Secrecy: Origins, Significance, Myth," Page 55. Accessed Sept. 8, 2020.

  3. Swiss Bankers Association. "The Fight Against Money Laundering." Accessed Sept. 8, 2020.

  4. U.S. Department of Justice. "Justice Department Reaches Final Resolutions Under Swiss Bank Program." Accessed Sept. 8, 2020.

  5. Swiss Bankers Association. "FATCA (Foreign Account Tax Compliance Act)." Accessed Sept. 8, 2020.

  6. CORE. "Recognition and Enforcement of Foreign Civil Judgments in Switzerland." Accessed Sept. 8, 2020.

  7. Swiss Financial Market Supervisory Authority. "Combating Money Laundering in the Context of Financial Market Supervision." Accessed Sept. 8, 2020.