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Created on 16.03.2018

Savings accounts versus fund investments – a comparison

Do you transfer a fixed amount to a savings account each month? Are you saving for something in particular?

Whatever your reason for putting your money into a savings account (sometimes also known as a savings book), you receive interest  in return. This is currently very low, and it takes an incredibly long time to significantly increase your money. That’s why investment is a good alternative to savings accounts. But what exactly are the differences between savings accounts and fund investments? Here’s a comparison:

Minimum amount

  • Saving

    You can make regular or one-off payments into a savings account as you wish.
  • Investing

    You can invest from CHF 20 regularly or a larger one-off amount (from CHF 2,000)

Time horizon/duration

  • Saving

    You can pay in and withdraw your money flexibly whenever you wish (taking account of any notice period)
  • Investing

    A medium to longer-term investment horizon is recommended when investing in funds. However, fund units can be sold at the current value at any time.

Risk

  • Saving

    Your savings are not subject to any fluctuations in value. The only risk of loss is if the bank were to become insolvent. However, Swiss legislation provides a certain degree of protection if this happens.
  • Investing

    The level of risk involved in fund investments varies. It’s therefore important to determine the most suitable investment based on the investor profile and investment horizon. Funds are classified as segregated assets and are therefore not included in the financial institution’s bankruptcy estate in the event of insolvency, which means you do not bear this risk.

Performance of assets

  • Saving

    You benefit from interest and compound interest with a savings account.
  • Investing

    The value of units in an investment fund fluctuates and depends on the value of the underlying securities. The following principle generally applies: the more risk you assume, the higher the return you can expect. You also benefit from the compound interest effect when investing provided you immediately reinvest any profit distribution in the fund.

Withdrawal of assets

  • Saving

    Your assets are always available to you in a savings account. An industry-standard notice period must be adhered to depending on the withdrawal amount.
  • Investing

    You can usually sell investments at any time. However, if you require the money urgently, you may have to sell at an unfavourable time or price. You can set up automatic and regular redemptions with a fund withdrawal plan.

Target group

  • Saving

    A traditional savings account is best suited to people who require access to their assets in the near future – for example, unforeseen expenses such as a visit to the dentist.
  • Investing

    Anyone who wishes to make the most of their assets, is willing to regularly invest at least CHF 20 and is happy to plan long-term can become an investor.
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