Why swiss bank is famous for black money?

Have you heard rich people in movies time and time again describe how they keep most of their money in the Swiss bank is this actually true in real life and if so what's all the hubbub about Switzerland 

Well, indeed, s
wiss banks are arguably the best banks to keep your money and not just for the rich but for everyone if you're not investing it of course 

So here's why swiss banks are so highly sought after starting with extreme privacy swiss banks have built up an indestructible reputation for privacy 

As they simply will not reveal your identity for any reason except for illegal pursuits now don't get too impressed as this is not from the goodness of their heart or outstanding integral practices 

After the swiss banking law of 1934 was passed it was made a criminal for swiss banks to even disclose a name of an account holder 

But privacy alone wouldn't attract so many people to invest in swiss banks though it is a great feature a lot of wealthy folks are intrigued by swiss banks due to their very high-interest rates 

While actually not really swiss banks have some of the worst interest rates in the world in fact they occasionally charge negative interest rates meaning that you have to pay the bank to keep your money there 

So swiss banks don't have good interest rates but what they do have is a great return on investments is wise to wait how can swiss banks offer a great return on investment when they averaged about zero per cent interest 

Well the secret lies in their shockingly low inflation rate over the past 20 years Switzerland has actually experienced five years of negative inflation or deflation which means that their currency has become more valuable year after year 

Now prolonged periods of deflation are terrible for a country as it indicates weak economic growth but in the case of Switzerland it's not too bad in the 20 years between 1999 and 2018

The average inflation rate in Switzerland was actually only 0.51 5% compared to the global average inflation rate of about 3% 

In the same period, the world actually had an average inflation rate of three-point four per cent but this does include the global financial crisis so we'll give them the benefit of the doubt and give them an inflation rate of three per cent

This means that every year the swiss currency gains about 2.5 per cent in value compared to the average currency 

This makes sense as if you take a look at the USD the swiss franc conversion rate you'll see that in 2003 you can get one point three seven swiss francs using us dollar

 But today you can't even get a full swiss franc using our dollar to really put this in perspective using an ROI of 2.5 per cent which is the 3 per cent global inflation rate minus a point 5 per cent inflation rate in Switzerland 

In the last 20 years by simply placing your money in a Swiss bank in the swiss franc currency you would have gained sixty-three point nine per cent in value in just a little more than eight years your money would have doubled 

Now of course that would have taken a total of twenty-eight point five years but you have to keep in mind that this is simply a savings account not real estate or mutual funds or index funds 

Despite this what's so impressive is that this comes close to the ROI of the real investment mutual funds 

which are considered to be one of the safer investments averaging about seven per cent after mutual fund manager fees when taking out inflation this comes down to four per cent which is quite comparable to swiss banks' ROI of two point five per cent 

Of course, wealthy people didn't become wealthy settling for two point five per cent is wise and they should for at least ten per cent or less real estate or high return mutual funds 

However, this makes swiss banks the perfect place to keep money between investments due to their unbeatable stability real estate may go through a housing bubble or crash the stock market may experience a bull market or bear market 

They do end up averaging a much better return on investment over the long term but the same cannot be said in the short term as a result oftentimes for periods of just a couple of months

It makes much more sense to put investment money into a swiss bank rather than others or investments even during the worst of recessions the swiss currency has proven to hold strong 

If you didn't look closely at the Switzerland inflation graph you may have not even noticed a peak in the inflation rate during the 2008 global financial crisis 

Switzerland only experienced an inflation rate of two point four three per cent during the global financial crisis which is still well under the global average inflation rate of three per cent 

Meanwhile, the global inflation rate peaked at eight point nine to six per cent in 2008 meaning that on average you would have had a six-point five per cent ROI by simply keeping your money in a Swiss bank rather than an average bank during that year 

And this was during a time when the s&p 500 was over half the single year and real estate prices plummeted again those did recover and have ended up doing better than a two-point-five per cent ROI 

But this showcases the stability of swiss banks even in the short term in the end swiss banks don't actually offer anything special that system apart other than their great privacy policies 

What actually attracts investment is the swiss economy which has proven to be one of the most if not the most stable economy in the world with little to no inflation 

This has made swiss banks the perfect opportunity to preserve the value of once money and retained purchasing power by avoiding inflation in their home country 

And that is why rich people love to keep the money that they have not already sunk into investments in swiss banks 

But the benefits don't just apply to rich people you could and should definitely take advantage of their strong economy 

Don't use them as an investment platform but definitely explore the option of using swiss banks as a place to keep your uninvested money whether just a couple of friends or tens of thousands of dollars.

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