Investing in retirement savings can have a significant impact on the returns, and selecting the right bank or online broker can result in significant cost savings. To maintain a comfortable standard of living in retirement, private provision is essential. Many financial institutions impose high fees on customers, which can diminish investment returns.
The costs typically include brokerage fees, custody fees, account management fees, and administration fees for financial products. In some cases, bank customers are even required to pay for annual tax statements. The fees for storing securities, known as custody fees, can vary widely from one bank to another.
A comparison conducted by Moneyland.ch revealed that the most cost-effective providers for custody fees were Cornèrtrader, FlowBank, and TradeDirect while Direct Net, UBS, and ZKB had the highest custody fees. The larger the securities volume, the higher the fees as custody fees are usually charged as a percentage of the total investment amount.
Experts suggest that a custody fee of 0.4 percent is no longer appropriate for the storage of exchange-traded and standardized securities. The degree of standardization in financial products can influence the justification for higher fees. Some banks charge lower custody fees for domestic securities while fees are typically higher for securities held abroad. Despite higher fees, investors should be aware of additional charges such as account and securities account management fees as well as charges for digital tax statements.
To reduce costs and improve investment returns, it is recommended that customers switch to online brokers or providers without custody fees such as Neobanks like Yuh and Neon that offer more favorable fee structures especially to those looking for a simplified investment experience.
In conclusion understanding and minimizing costs is crucial when it comes to maximizing returns on investments in retirement savings plans
