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Pillar 3a: bank or isurance? Pillar 3a: bank or insurance?
We’ll show you which 3a solution is better for you: a bank or insurance solution.
Which 3a solution is better for you: bank or insurance.
What are the differences between a bank or insurance solution?
Pillar 3a insurance solution: expensive and inflexible
Pillar 3a savings via an insurance solution are always linked to at least one biometric risk such as death and/or disability. This means that in addition to the savings component, the risk of death and/or disability is also insured.
For the insurance component, part of the insurance premium is used to cover the risks, and the other part – minus the administrative costs – goes into the savings component. Depending on the insurance solution, the savings portion only earns interest at the technical interest rate or is invested in investment funds.
Combinations of these are also possible, or life insurance products for example that guarantee an endowment sum of 80%. These product strategies are usually implemented with structured investment products and involve additional guarantee costs. Life insurance in your pillar 3a can be financed with periodic premium payments as well as through a single premium.
The contractual term is usually very long (until retirement), and additional costs may be incurred in the event of early termination.
Pillar 3a bank solution: flexible and transparent
If you have a pillar 3a in the form of an account or securities solution, you can decide how much you want to pay in each year (up to the maximum permitted by law).
There is no minimum deposit amount and deposits can be made from CHF 1. In addition, it is possible to switch from an account solution to a securities custody account or vice versa at any time. There is also nothing to stop you from changing your investment strategy during the course of the year. With a bank solution, it is possible to open multiple pillar 3a accounts or custody accounts. This provides tax advantages when making a withdrawal.
Which is better for your pillar 3a: a bank solution or an insurance solution?
Those who want to invest at low cost and still want full flexibility over their deposits are probably better off with a bank solution. For individuals who are looking for greater security, especially protection for surviving dependants in the event of death, an insurance solution may be appropriate.
Either way, it is important to look at the individual situation closely and weigh up the pros and cons of the solutions.
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| Insurance solution |
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