Interest Rate
What an interest rate is, how the Swiss National Bank's policy rate reaches savings accounts, mortgages and bond prices, and why banks don't pass it on one for one.
Key idea
In August 2026 the Swiss National Bank's policy rate was 0%, the savings rates banks published averaged 0.07% and a 3-year SARON mortgage cost 1.10% a year. The SNB's rate guides what banks pay each other overnight, but banks set their own rates for savings and mortgages, and markets set the rates for lending over many years.
What it is
An interest rate is the price of money: what a borrower pays a lender for using it, as a percentage a year. Money in a savings account is a loan to your bank, so the bank pays you interest. With a mortgage you're the borrower, so you pay it.
In June 2023, the savings rates Swiss banks published averaged 0.53%, so CHF 10,000 earned CHF 53 in a year. In August 2026 they averaged 0.07%, or CHF 7.
From the SNB to your bank
The Swiss National Bank (SNB) sets one rate, its policy rate: the level at which it wants short-term interest rates in Switzerland to sit. It keeps SARON close to it. SARON is the rate at which banks lend each other money overnight, against collateral. As SARON moves, so do the banks' own costs, and they adjust what they pay on savings and charge on loans. The SNB itself calls the effect on savings accounts and mortgages "indirect":
SNB policy rate
0%
unchanged since 20 June 2025
SARON
−0.06%
what banks pay to borrow from each other overnight, against collateral
Savings account
0.07%
average published rate
SARON mortgage
1.10%
3-year term
In August 2026 the policy rate was 0%, where it has been since 20 June 2025, and SARON stood at −0.06% at the end of the month. Banks' published savings rates averaged 0.07%, and a SARON mortgage, whose rate follows SARON, cost 1.10% for a 3-year term. The two sit side by side: the bank pays the first and charges the second.
June 2023 and August 2026
The SNB raised its rate to 1.75% in June 2023, then cut it step by step to 0% by June 2025. Here's how other rates moved over the same time, as the SNB records them:
SNB policy rate
- June 2023: 1.75%
- August 2026: 0%
Savings account
- June 2023: 0.53%
- August 2026: 0.07%
SARON mortgage, 3 years
- June 2023: 2.52%
- August 2026: 1.10%
Fixed mortgage, 10 years
- June 2023: 3.00%
- August 2026: 2.03%
Confederation rate, 10 years
- June 2023: 0.97%
- August 2026: 0.47%
The policy rate fell from 1.75% to 0%, a fall of 1.75 percentage points. (A percentage point is the plain difference between two rates: from 2% to 1% is one point.) SARON mortgages followed most closely, from 2.52% to 1.10%, a fall of 1.42 points. Savings accounts moved least, from 0.53% to 0.07%, a fall of 0.46 points, because they had never risen far in the first place.
Fixed 10-year mortgages fell from 3.00% to 2.03%, or 0.97 points. The 10-year Confederation rate, roughly what the federal government pays to borrow for ten years, fell from 0.97% to 0.47%, or 0.50 points.
Why bond prices move
Fixed mortgages and bonds depend on long-term rates: the rates for lending money for many years. Markets set these, based on where they expect interest rates and inflation to go, so they can move while the SNB sits still. From the end of June to the end of August 2026, the 10-year Confederation rate rose from 0.31% to 0.47% while the policy rate stayed at 0%.
When rates rise, existing bonds lose value, because new ones pay more; the bond page shows why. A Confederation bond paying back a single sum in ten years would have lost about 1.5% of its price over those two months. The return you lock in by buying a bond at today's price is its yield to maturity.
The honest caveat
The SNB doesn't set your bank's rates. In its own words, it "cannot simply dictate the interest rates that apply in our everyday lives". Banks pass changes on unevenly and late: even with the policy rate at 1.75%, the average published savings rate peaked at 0.76%, in early 2024.
And the rate that counts is the one after inflation. In August 2026 prices were 0.8% higher than a year earlier, so a savings account paying 0.07% lost buying power: its real return was negative.
Swiss note
Rents follow mortgage rates through the reference interest rate, which the Federal Office for Housing publishes every quarter: the average rate on Swiss mortgages, rounded to the nearest quarter of a percentage point. In August 2026 it stood at 1.25%, where it has been since 2 September 2025; updates come out on the first working day of March, June, September and December. Each quarter-point rise usually lets a landlord raise the rent by up to 3%, as long as mortgage rates are below 5%; a fall lets tenants ask for a cut of 2.91% in principle, against which higher costs may be offset. SARON mortgages make up about a fifth to a quarter of all mortgages, according to the same office. Check your lease for the reference rate your rent is based on.
Key takeaways
- —An interest rate is the yearly price of borrowing money, paid by the borrower to the lender.
- —From June 2023 to August 2026, the SNB policy rate fell from 1.75% to 0%, savings rates only from 0.53% to 0.07%.
- —Long-term rates are set by markets and can rise while the SNB stands still, pushing bond prices down.
- —What counts is the rate after inflation: in August 2026, 0.07% on savings lagged prices rising 0.8%.
Related concepts
Bond
Lend money, collect interest, get your principal back.
Yield to Maturity (YTM)
The coupon is what a bond pays. The yield is what you actually earn.
Inflation
Why CHF 10,000 buys a little less as prices rise, and what to do about it.
Real Return
The return that counts is the one left after inflation.
Emergency Fund
The cash that keeps a bad month from becoming a forced sale.