UBS plans to charge its Swiss clients an annual fee of 0.6% on deposits of more than 500,000 euros ($560,000), lowering the threshold from the previous €1m.
The world's largest wealth manager is moving to penalise its richer clients for being risk averse as negative interest rates in Europe are poised to stay.
UBS's decision comes after Credit Suisse said it will impose a fee of 0.4% on customers with euro accounts of more than €1m from September. UBS has already said it will introduce negative rates for clients holding large Swiss franc balances, while Credit Suisse said it's also considering the step, Bloomberg reports.
Tidjane Thiam, Credit Suisse's chief executive, said that it was considering charging clients who are holding cash with them in Switzerland to "mitigate [the] pressure" of negative interest rates.
Smaller Swiss banks like Pictet and Julius Baer have already been passing on the negative interest rates set by the central bank to clients. Lombard Odier is set to charge negative rates on euro deposits over €1m from October for certain clients.
Banks hope that by passing on negative rates, they will push companies and wealthy clientes to invest more of their money instead of keeping the substancial pot of cash at the bank. However, there are others that claim the banks are purely punishing clients for not wanting to take a risk.