Should you lock your exchange rate when you are paid in Swiss francs?

"Locking your exchange rate" is a convenient and misleading phrase. It suggests you are stopping the clock, when in fact you are buying a dated instrument whose price follows an arithmetic rule. This guide sets out that rule, works it through with the policy rates in force in September 2026, and shows where the real cost sits — which is almost never where people look for it.

It concerns anyone earning in Swiss francs and spending in euros: cross-border workers from Haute-Savoie, Ain or the Pays de Gex, expatriates still repaying a loan in France, freelancers invoicing in CHF from Geneva or Vaud.

In this guide:

• 1. What exactly is a forward exchange contract?
• 2. Why is a forward rate not a forecast?
• 3. What does a monthly programme actually earn?
• 4. Which rate should you compare the offer against?
• 5. How much does the institution's margin cost you?
• 6. What are you actually signing?
• 7. When does a forward contract make sense?
• 8. What alternatives suit a monthly salary?
• 9. Frequently asked questions

1. What exactly is a forward exchange contract?

A forward exchange contract is a firm commitment, entered into today, to exchange a set amount of one currency for another, on a future date and at a rate fixed at signature. Both sides are bound: you must deliver your Swiss francs (CHF), the institution must deliver your euros (EUR), whatever the market rate turns out to be on the day.

Three parameters define the contract, and all three are fixed at signature:

• The amount, usually expressed in the currency you are selling — here Swiss francs.
• The maturity, or the series of maturities if it is a contract with monthly instalments. Hold on to that point: a series is not a single maturity, and section 3 shows why it changes the whole calculation.
• The forward rate, which is the heart of the matter and which the next section takes apart.

What surprises people most: this is not an option. You are not buying the right to convert at that rate, you are taking on the obligation to do so. If the market moves in a direction that would have suited you, you cannot walk away from the contract — you can only unwind it, that is, sign a second one in the opposite direction at the conditions of the day. That is where the costs appear.

2. Why is a forward rate not a forecast?

This is the most widespread and most mistaken idea on the subject. When a bank quotes you a twelve-month rate different from today's, it is not telling you where it thinks the euro is heading. It is applying an arbitrage relationship which, if it were violated, would let anyone make money without risk.

The relationship that sets the price

The reasoning comes down to two routes that must end in the same place. You hold francs and you want euros in a year's time. First route: convert today at spot and deposit the euros at the European rate for a year. Second route: deposit your francs at the Swiss rate for a year, and convert at maturity at a rate agreed in advance.

If these two routes did not produce the same result, you could simply borrow in one currency, lend in the other and pocket the difference without taking any risk at all. The market removes that gap continuously. The forward rate is therefore entirely determined by today's rate and by the gap between the two interest rates:

The consequence is direct: the currency with the lower interest rates trades at a higher price forward than spot. For the Swiss franc (CHF), that means a franc buys more euros forward than it does today — which, in a quote expressed in francs per euro, shows up as a lower forward EUR/CHF rate. The figures in the table below go down: that is in your favour.

The calculation with September 2026 rates

The two rates that matter are public. The European Central Bank (ECB) raised its deposit rate to 2.50% on 10 September 2026, effective 16 September. The Swiss National Bank (SNB) kept its policy rate at 0.00% at its assessment of 24 September 2026. The yield gap is therefore 2.50 points, entirely to the franc's disadvantage — which, for anyone selling francs forward, translates into a gain.

Starting from the ECB reference rate of 11 September 2026, 0.9451 francs to the euro, here is what the formula gives for a single conversion of 5,000 CHF, before any margin:

Differences calculated on unrounded amounts.

The carry grows with the term, and almost exactly in proportion: that is logical, since it pays for the time over which the rate gap applies. You are not gaining because someone is betting on the euro, but because you are giving up, for a year, the 2.50% return your euros would have earned (the ECB deposit rate).

3. What does a monthly programme actually earn?

This is where most reasoning goes wrong, including in good faith. The rate of 0.9220 applies to delivery in twelve months. A salary, by contrast, arrives every month: the first instalment is delivered in one month, the second in two, and only the twelfth enjoys the full carry.

A monthly programme is therefore not a twelve-month contract, it is a ladder of twelve contracts with increasing maturities, each at its own rate. The average carry collected is, mechanically, about half the maximum carry.

Put another way, the equivalent flat rate of a monthly programme sits at around 0.9325, close to the six-month forward, not 0.9220. That is the figure to keep in mind when someone quotes you a contract with monthly instalments. We come back to it in section 5, because this very gap is what lets a margin go unnoticed.

4. Which rate should you compare the offer against?

Here is the costliest reasoning error, and it often appears in comparisons: setting the forward rate against today's spot. Those two figures do not refer to the same date and are therefore not comparable.

The only meaningful benchmark is the rate that will exist at maturity. Locking in at 0.9220 for twelve months pays off if, in twelve months, the euro is worth more than 0.9220 francs, and costs you if it is worth less. The break-even is the forward rate itself, not today's rate.

Read this way, the contract changes character. It does not protect you against "the euro falling" in general: it protects you above 0.9220 and costs you below it. The working corridor we use for the coming weeks runs from 0.9380 to 0.9550, but over twelve months the uncertainty is of a different order — the euro fell to 0.9008 on 9 March 2026 before recovering. You can follow the market live with our real-time EUR/CHF converter and read our EUR/CHF forecast analysis.

5. How much does the institution's margin cost you?

The theoretical rate calculated above is not the one you will be offered. The institution adds its own remuneration, and it does so by degrading the rate rather than charging a line of fees. That is why a forward contract is so often presented as "fee-free": the margin is inside the rate.

It is therefore invisible unless you recalculate the theoretical rate. Take a single contract of 5,000 CHF at twelve months, quoted at 0.9350 when theory gives 0.9220:

A margin of about 1.4% therefore absorbs more than half the carry the rate gap was paying you.

The same logic applies to ordinary conversions, outside any forward contract: the margin on the interbank rate is the dominant cost, far beyond the fees on display. Our exchange rate comparison sets out the differences observed between providers.

6. What are you actually signing?

Beyond the rate, a forward contract carries three constraints that sales pitches rarely mention, and which explain why it sits badly with salaried income.

The commitment is firm for the whole term

You must deliver the francs agreed at each maturity. If your circumstances change — end of contract, redundancy, a move to part-time, a return to France — the source of francs disappears but the obligation remains. You then have to buy francs on the market to honour the contract, at the rate of the day, which is precisely the currency risk you set out to avoid.

Collateral can be required, and called

Because the institution carries counterparty risk for the whole term, it frequently asks for collateral, often a percentage of the notional. If the market moves against its position, it can demand a top-up before maturity: that is a margin call. A contract presented as "fee-free" can therefore tie up cash at the worst possible moment.

Early exit has a price

Unwinding a contract before maturity means entering a second one in the opposite direction. The difference between the two rates falls due, on top of administrative fees. On a twelve-month contract broken after four, the bill is rarely trivial.

7. When does a forward contract make sense?

The test is not the amount, it is the certainty of the maturity. A forward exists to neutralise the risk on a dated commitment whose date and amount are outside your control. It is poorly suited to a recurring flow whose timing you decide yourself.

That last line deserves a pause. Locking a rate with no maturity to cover does not remove the risk: it turns it into a directional bet, with the added drawback that you can no longer change your mind.

8. What alternatives suit a monthly salary?

For recurring income, three approaches stand up, and they are not mutually exclusive.

Convert in regular slices

Convert every month, on a set date, without trying to pick the moment. The method maximises nothing, but it rules out the worst case: a single conversion landing on the worst possible day. On a salary, that is mechanically what happens if you do nothing in particular — provided you resist the urge to wait.

We have put figures on why calendar landmarks do not help: see the myth of the mid-month and month-end rate.

Give yourself a window rather than a date

Keep control for a few weeks and trigger the conversion within a range decided in advance. That assumes you can hold the francs on a CHF account without converting them immediately, and that you set your threshold before placing the order — not after.

Do not convert what you do not need to convert

The share of income spent in Switzerland does not need to become euros. It is the simplest saving, and the most often overlooked: every conversion avoided removes a margin, whoever the provider is.

9. Frequently asked questions

Is locking your exchange rate a good idea in 2026?

It depends on one thing only: do you have a dated commitment to cover? If so, the forward contract does its job, and the rate gap between the eurozone (2.50%) and Switzerland (0.00%) currently works in your favour when you sell francs, for as long as that gap holds. If you are converting a salary month after month, with no imposed maturity, a firm commitment mainly buys you rigidity, for half the carry. This information is provided for guidance only and does not constitute personalised advice.

How is a forward exchange rate calculated?

Forward rate = spot rate multiplied by (1 + Swiss rate × term), then divided by (1 + European rate × term). With the ECB reference rate of 11 September 2026, 0.9451, and the rates in force on 30 September 2026 — ECB 2.50%, SNB 0.00% — the twelve-month rate comes out at 0.9220. The calculation contains no market expectation whatsoever: it merely neutralises the yield gap between the two currencies.

Why does the forward rate differ from today's rate when selling francs?

Because the Swiss franc is the lower-yielding of the two currencies: the SNB policy rate is 0.00%, against 2.50% for the ECB deposit rate. The market compensates you for tying up your position with a favourable carry. This is not a view on the euro: the relationship would be reversed if Swiss rates rose above European ones.

Does a contract with monthly instalments earn as much as a twelve-month contract?

No, about half. A monthly programme is a ladder of twelve contracts with increasing maturities: the first instalment is only delivered in one month and therefore carries just one twelfth of the carry. For 5,000 CHF converted each month, the total gain is around 860 euros over the year, about 72 euros a month on average, not 132 euros. The equivalent flat rate is around 0.9325.

What is the break-even of a forward exchange contract?

It is the forward rate itself. A contract struck at 0.9220 for twelve months pays off if the euro is worth more than 0.9220 francs at maturity, and costs you if it is worth less. Comparing it with the ECB reference rate of 11 September 2026, 0.9451, makes no sense: the two rates do not refer to the same date.

Is a forward exchange contract really fee-free?

It generally carries no stated fees, because the remuneration is built into the rate offered. On a single contract of 5,000 CHF at twelve months, a quote of 0.9350 when theory gives 0.9220 represents a margin of about 1.4%, or 75 euros. The only way to measure it is to recalculate the theoretical rate for the contract's exact maturity.

Can a forward exchange contract be cancelled?

Not unilaterally. It has to be unwound by entering an opposite contract at the conditions of the day, and the difference in rates remains payable, administrative fees included. This is the heaviest constraint if your working circumstances change mid-contract.

What is a margin call on a currency contract?

It is the demand for additional collateral that the institution can make before maturity if the market moves against its position. It ties up cash at a moment you do not choose, and it exists even where the contract is presented as fee-free.

Does ibani let you lock an exchange rate?

Not in the sense of a forward contract: ibani does not sell forward contracts. On request by e-mail or telephone, a rate can be locked for 24 hours. Otherwise, the salary is received in francs on a personal Swiss transit IBAN, which is a pass-through account and not a deposit account; in manual mode, you trigger the conversion yourself at the market rate, plus a margin of 0.40% to 0.15% depending on the amount.

A salary in francs, spending in euros?

Whichever method you settle on, the cost that comes back every month is the conversion itself. Across twelve conversions a year, a one-point difference in the rate weighs more than most timing decisions. That is the line worth looking at first, before considering any hedging instrument.

Sources. Monetary policy data come from the official releases of the European Central Bank (ECB) of 10 September 2026 (deposit rate raised to 2.50%, effective 16 September) and of the Swiss National Bank (SNB) of 24 September 2026 (policy rate held at 0.00%). The spot rate used, 0.9451, is the EUR/CHF reference rate published by the ECB on 11 September 2026. The historical rates quoted, including the low of 9 March 2026, come from the ECB's daily reference rates; the working corridor is the one used in our EUR/CHF forecast analysis. The forward rates in this guide are not market quotes: they are recalculated from those three inputs using the formula in section 2.

This article is provided for information only and constitutes neither an investment recommendation nor personalised advice. The forward rates given as examples move with the market and with central bank decisions. For a commitment involving a significant amount, have your situation reviewed by a professional.