SARON: Definition & Meaning | Bondfish
SARON (Swiss Average Rate Overnight) is the risk-free reference rate for the Swiss franc, calculated from actual overnight transactions in the Swiss franc repo market.
What it means
SARON is administered by SIX Swiss Exchange under the oversight of the Swiss National Bank (SNB) and has been the standard Swiss franc benchmark since CHF LIBOR was discontinued at the end of 2021. Unlike LIBOR, which was based on estimated interbank borrowing quotes, SARON is a transaction-based rate, built from actual secured (repo) trades, which makes it far harder to manipulate.
Because SARON reflects an overnight rate, most Swiss franc floating-rate notes and loans reference a compounded SARON calculated over the relevant interest period (e.g., three or six months), rather than a single forward-looking quote.
As of late September 2026, SARON has been trading slightly negative, around −0.04%, consistent with the SNB policy rate sitting at 0.00%.
Why it matters for bond investors
Investors holding Swiss franc floating-rate notes or CHF-denominated structured bonds need to understand SARON because it directly sets their coupon: a bond paying "compounded SARON + spread" will see its interest payments move with Swiss money-market conditions. SARON's proximity to zero (or negative territory) also explains why CHF-denominated debt has historically offered some of the lowest coupons among major currencies.
Related terms
This definition is for general information only and is not investment advice. Bond investing involves risk, including possible loss of principal.