3a accounts: average rates of 0,21% and wide disparities among banks

Context

TL;DR

• The average 3a rate fell to 0,21% in October
• Caisse d'Epargne d'Aubonne offers 1%
• 68 out of 93 institutions pay at most 0,2%
• 500 francs per month for 30 years: 209'666 francs at 1%

Key facts

• Unweighted average rate in October → 0,21%
• Previous comparison → 0,27% and 0,61%
• Highest offer → 1%
• Cornèr Banca → 0,7%
• Third group → 0,65%
• Average of ten major institutions → 0,14%
• Bank Cler, Migros Bank, Raiffeisen and Valiant → 0,2%
• PostFinance and Banca cantonale vodese → 0,05%

Moneyland.ch's analysis, reported by Keystone-ATS, finds an unweighted average of 0,21% for October on pillar 3a accounts. The figure signals a further reduction in remuneration for those who keep their pension savings in an account.

The report compares October's figure with the previous levels of 0,27% and 0,61%. According to the source, the trend reflects the general interest-rate environment and the reductions in the SNB's policy rate, which are gradually being passed on to 3a accounts as well. Ralf Beyeler, Moneyland expert.

A wide gap among providers

The ranking shows clear differences: at the top is Caisse d'Epargne d'Aubonne, in French-speaking Switzerland, with 1%. Cornèr Banca is second at 0,7%, while Crédit Agricole Next Bank, Hypo Vorarlberg Bank, Pilla and Tellco share third place at 0,65%.

However, the majority of institutions remain far from the highest rates. Moneyland.ch analyzed 93 providers: 68 offer no more than 0,2%, and two others pay no interest at all. The analysis therefore shows that the choice of provider results in different rates being applied to the same type of product, the pillar 3a account.

Ralf Beyeler also notes that considerable sums are usually held in pension accounts. For this reason, the expert says, checking whether switching is worthwhile can leave more money available in retirement.

The picture also remains weak among the ten largest and best-known banks. The average for the group comprising the six Swiss banks active at a supraregional level and the four largest cantonal institutions is 0,14%. Bank Cler, Migros Bank, Raiffeisen and Valiant offer a rate of 0,2%; for PostFinance and Banca cantonale vodese, the figure falls to 0,05%.

Operational details

The impact of the rate on the final balance

Two alternatives with different effects

The gap emerges above all in the final balance: Moneyland.ch illustrates it by assuming 500 francs paid every month for 30 years, thereby highlighting the effect of compound interest, which savers often underestimate.

The source's comparison can be read as follows:

The final gap between the two bank accounts exceeds 28'000 francs. The calculation shows that the rate affects more than just the return for a single period: with regular deposits, the difference is reflected in the capital available in retirement. This is why the source urges readers not to underestimate compound interest.

The comparison then presents a riskier alternative: Moneyland.ch attributes significantly higher long-term returns to securities-based solutions in Pillar 3a. Retirement apps allow users to invest in well-diversified portfolios on relatively favorable terms. In the theoretical example, an average net return of 5,5% would bring retirement assets to approximately 445'000 francs after 30 years.

This figure is not guaranteed: if the markets perform poorly, the amount could be much lower. Investing in securities means being exposed to strong fluctuations and the risk of losses; those who still have many years before withdrawing the capital can generally withstand these ups and downs. Not all savers, however, react in the same way: when stock markets fall, some end up selling in a panic. For these customers, the source considers an interest-bearing account more suitable, even though it offers a lower return.

Key points

How to move from assessment to decision

The operational process that emerges from the analysis separates two decisions: choosing the provider of the 3a account and deciding whether to stay with an account or switch to an investment solution. The source points out that the transfer can take place without difficulty and does not require changing your main bank.

Four practical steps

1. Record the interest rate credited on your 3a account and compare it with the offers reviewed by Moneyland.ch. The analysis covers 93 institutions and shows how far apart the terms applied can be.

2. Consider another provider without confusing the 3a account with your main banking relationship. The transfer concerns the pension product: you do not need to change the bank you use for other transactions.

3. Measure the long-term effect using the example from the source: 500 francs paid in every month for 30 years. The comparison between an interest rate of 0.05% and one of 1% makes the impact of compound interest on the final balance visible.

4. Choose between an interest-bearing account and an investment solution based on your ability to tolerate fluctuations. Those who still have many years ahead can generally cope better with rises and falls, while those who might sell during a negative phase may be better off with an account, even if it offers a lower return.

This sequence avoids confusing the rate offered by the provider with the theoretical return of an investment strategy. The first comparison concerns the account’s interest rate; the second concerns market risk and your personal reaction to losses. Even a well-diversified portfolio, such as those offered by the pension apps mentioned by the source, remains exposed to possible negative performance.

The review can therefore start with your own account, continue with a comparison of the offers and end with a choice consistent with your savings horizon and your tolerance for fluctuations. To explore the topic further, consult terzo pilastro 3a.

Source: swissinfo.ch