More and more people are using pillar 3a to provide for their old age. According to surveys of the Swiss Pension Association in 2021 the number of custodial accounts for pillar 3a increased by +14.8%, although there are clear differences between men and women: women have a significantly lower share of securities in their Pillar 3a wealth at around 30.2% than men at 37.2%. Similar figures can also be seen in Moneyland’s research for the year 2022, according to which 58% of those surveyed stated that they had a Pillar 3a solution in securitiesagain more men than women.
The fact is that ‘saving with securities’ has overtaken or even overtaken saving. The reasons for this are, on the one hand, the low interest rate environment, but also more and more pension apps, funds and providers that offer attractive and simple solutions.
With inflation rising, interest rates are also rising and I was curious to see if a Pillar 3a savings account could suddenly be attractive again and who it would be suitable for. Here are some thoughts on that.
Advantages:
risks:
Advantages:
Cons:
Unfortunately, there is no clear answer to this, because it strongly depends on the prevailing interest rates, your personal preferences, risk awareness, the time available and the use of pillar 3a.
Pillar 3a in securities makes a lot of sense if you:
Especially if you need the money quickly, a solution with a savings account makes sensefor example for a home improvement, interest rates should go back up quite a bit, or you’re really afraid of losing it with an investment.
Interest rates on Pillar 3a are currently rising, but Still low compared to inflation and there are relatively large differences between banks. According to a study by the Vermögenszentrum, the interest rates of various providers as of December 1, 2022 were between 0.0% and 0.7%.
Look at the returns over the past 10 yearsthen the best provider had an average return of 0.77% from. At the moment, interest rates for pillar 3a are rising only slowly compared to, for example, mortgages. If you have a Pillar 3a savings account, it pays to compare interest rates, for example here at Moneyland.
Since we can all have multiple Pillar 3a accounts, you don’t necessarily have to choose one or the other, you can also have a 3a pillar as a savings account and, for example, a second or more in securities. Multiple Pillar 3a investments in securities with very different risk strategies are also possible. They do not have to be 100% shares, often even adding 5-10%, for example, provides advantages over a savings account with a very manageable risk.
For 2023, the maximum amounts for Pillar 3a are CHF 7,056 for employees and up to CHF 35,280 (or up to 20% of labor income) for the self-employed.
At this point, anyone who has a Pillar 3a in securities definitely needs some patience and calmness. Last year I didn’t watch at all.
How do you see it: Pillar 3a on the savings account attractive again, rather securities or rather both?
