How to Invest Money in Switzerland

As a financial center, Switzerland has the reputation of being a safe haven – largely because of its political and economic stability. In this introductory guide, moneyland.ch lists the various solutions available for private investors who want to invest money in Switzerland.

Savings accounts

• How it works: You deposit money at a Swiss bank. The bank pays you interest for the use of your money. In addition to comparing interest rates, it is also important to look at limitations on withdrawals. You can find all of this information using the moneyland.ch Swiss savings account comparison.

If you live and earn income in Switzerland, you can also use pillar 3a retirement savings accounts. The interest rates of these accounts are often slightly higher than those of regular savings accounts because the money can only be withdrawn five years before your reach Swiss retirement age, at the soonest.

• How to invest: Opening a savings account at a Swiss bank is normally simple. However, some Swiss banks only open savings accounts in conjunction with paid private accounts (checking accounts). Compare offers before deciding on which savings account to use, as interest rates vary broadly across different Swiss banks.
• Investment costs: Most Swiss banks do not charge any fees when you open a savings account. However, some do charge account closure fees when you close your account or terminate your banking relationship. You also pay overdraft fees if you withdraw more money from your savings account than the limits allow for. Get informed about limitations on withdrawals in advance. The interest payments you get from the bank are subject to a Swiss withholding tax if they exceed 200 francs.
• Security: Swiss savings accounts are considered to be relatively safe. Account balances are protected by the Swiss bank depositor protection scheme, up to a limit of 100,000 Swiss francs per customer and bank.
• Risks: Savings accounts at Swiss banks are a very low-risk investment. There is almost no risk of your money losing its nominal value, unless the bank ever charges negative interest.
• Potential returns: Investing in savings accounts has very little risk, but it also does not give you the opportunity of earning exceptional returns. While savings accounts currently pay interest, the real interest rates after accounting for inflation can still be negative. In the past too, Swiss savings accounts yielded very low returns compared to investments in the Swiss stock market, as the historical interest and return calculator shows.

Medium-term notes and fixed deposits

• How it works: A medium-term note is a security that must be held in a custody account. When you buy a Swiss medium-term note from a bank, you agree to lend your money to a bank in exchange for interest payments. Unlike savings accounts, the interest rates of medium-term notes are fixed, and remain the same for the full investment term. You can normally choose a term between two and ten years. Your money is blocked for the duration of the term. Most Swiss banks offer medium-term notes starting from 1000 francs.

Some Swiss banks offer fixed deposit accounts. These are similar to medium-term notes in that they have fixed terms and fixed interest rates. The difference is that they are a bank account and not a security.

• How to invest: You can buy medium-term notes from most conventional Swiss banks. Some banks also offer fixed deposit accounts. You should compare the interest rates and costs before you invest.
• Investment costs: Medium-term notes are securities, and have to be kept in a custody account. Many Swiss banks do not charge custody fees for their own medium-term notes, but some do. Fixed deposit accounts may have account fees. You can compare the costs and yields using the Swiss medium-term note comparison on moneyland.ch.
• Security: Because medium-term notes and fixed deposits from Swiss banks are also covered by Swiss depositor protection, they are a very low-risk investment just like savings accounts.
• Risks: As with savings accounts, the chance of the money you invest in medium-term notes or fixed deposits losing is nominal value is almost null. But bear in mind that your money will be blocked for the full investment term.
• Potential returns: The interest rates are normally slightly higher than those of Swiss savings accounts. The rule of thumb: The longer the investment term, the higher the interest rate.

Bonds

• How it works: A bond is a securitized loan agreement by which you agree to give the bond’s issuer a loan that must be repaid after a fixed period of time. In most cases, the interest rate is fixed and remains the same across the full investment term. Bonds may be issued by national or municipal governments, by international organizations, by bond issuing cooperatives, and by companies. As the creditor, you receive regular interest payments throughout the term. At the end of the investment term, the borrower repays you the borrowed money in full.

If you do not want to keep a bond until the term expires, you have the option of selling it to another investor on the stock exchange. The prices for which bonds are bought and sold on the stock market fluctuate along with market interest rates and the issuer’s creditworthiness.

• How to invest: Many Swiss banks will buy bonds for you on request. You can also use their online trading platforms. The fees charged by the bank or broker can substantially reduce your returns. You can compare the costs of trading bonds with Swiss banks using the online trading comparison on moneyland.ch.
• Investment costs: Brokerage fees are different at each Swiss bank, and can be very high. Most banks also charge custody fees.
• Security: Bonds are not covered by bank depositor protection, but you can normally transfer your bonds to a different bank if your custodian bank goes bankrupt. How secure a bond is primarily depends on how creditworthy its issuer is. Make sure to check an issuer’s credit ratings before you buy their bonds. You are the creditor, so you bear the risk of the borrower not being able to repay the debt. Swiss federal government bonds are generally considered to be extremely safe, and have top ratings from all rating agencies.
• Risks: The amount of risk depends mostly on the creditworthiness of the bond’s issuer. Your investment will not lose its nominal value as long as you keep the bond until the end of the contract’s term, and the borrower repays the loan.
• Potential returns: The returns you can earn with bonds vary greatly depending on the creditworthiness of issuers. In every case, you receive interest payments for the use of your money. But the rule is: The higher the risk of the borrower not repaying the loan is, the more interest they will pay on their bonds. So the more risk you are willing to take on, the higher the potential returns will be.

Stocks

• How it works: When you invest in a stock, you become a shareholder in a company that is listed on a stock exchange. Stock prices change constantly, so it is equally possible to earn high returns or to lose all of your money. Many companies distribute part of their profits to their shareholders in the form of dividends.
• How to invest: You can buy shares using a stock brokerage account from a Swiss bank. Banks that specialize in online trading generally charge the lowest fees. You can compare offers using the online trading comparison on moneyland.ch.
• Investment costs: You have to pay a brokerage fee when you buy or sell shares. Additionally, you also pay a Swiss stamp duty, which is the same at all Swiss banks. Other costs include possible custody fees for the custody account that your shares are kept in, and Swiss value-added tax (VAT) for the fees charged by your bank. The shareholder dividends you receive are subject to a Swiss withholding tax. If you live in Switzerland, dividends are subject to Swiss income taxes.
• Security: Stocks are not covered by bank depositor protection. If your Swiss custody bank goes bankrupt, you will not lose your stocks, but can transfer them to a different custodian bank. You can find more information in the guide to Swiss bank depositor protection.
• Risks: The risk of an individual company losing value is relatively high. Even a total loss cannot be ruled out because companies can go bankrupt. For that reason, it is beneficial to use a diversified portfolio of many different stocks in different industry sectors.
• Potential returns: While the risk of losing money is high, the chances of earning returns are also high. While multiplying your money several times over rarely happens, it is possible. If you receive shareholder dividends, those also count towards returns on your investments.

Passive funds: ETFs and index funds

• How it works: Exchange-traded funds (ETFs) are an alternative solution for investing in stocks. These funds are traded on stock exchanges, and are managed passively. They buy and hold shares in many different companies in order to replicate the performance of stock indexes like the Swiss Market Index (SMI) and the Swiss Performance Index (SPI) as accurately as possible. You can buy shares in stock ETFs using a brokerage account at a Swiss bank. Stock index funds are very similar in that they also aim to replicate stock indexes as accurately as possible. The main difference is that they are not traded on stock exchanges.

If you want to invest in Swiss funds, make sure to check if a fund is domiciled in Switzerland before you invest.

• How to invest: You can buy shares in an ETF using a stock brokerage account, just as you would when you buy shares in a company’s stock. It is worth comparing stock brokerage accounts at different Swiss banks. Index funds, on the other hand, can often only be bought directly from the banks that manage them.
• Investment costs: The fund’s managers pass on their fees and running costs in the form of the total expense ratio (TER). These costs negatively impact your returns. The costs are typically moderate compared to those of actively-managed funds.

In addition to the fund’s TER, you also need to account for the costs of buying, holding, and selling your fund shares. Using the cheapest stock broker for your needs helps you minimize brokerage and custody fees.

• Security: ETFs and index funds are generally considered to be secure. If your Swiss custodian bank goes bankrupt, your fund shares are segregated, and remain in your possession rather than being liquidated with the bank’s assets.
• Risks: There is a risk of your investment losing value. However, the risk is much lower than when you invest in individual stocks because your money is invested in many different companies.
• Potential returns: it is possible to achieve good returns over the mid-term to long-term. For example, between 2000 and 2023, the SMI went up by 4.4 percent per year, as the historical return calculator on moneyland.ch shows. But the value of your investment can fluctuate heavily in the short-term, and it is quite possible the nominal value can fall below the amount you invested for certain periods of time.

Mutual funds

• How it works: Actively-managed stock funds may also invest in many different securities. Instead of trying to replicate an index, mutual funds try to outperform the market by actively choosing their investments. Mutual funds may make changes to their investment portfolios on an ongoing basis.

Many Swiss pillar 3a retirement funds are actively managed.

• How to invest: You can buy shares in mutual funds using a brokerage account from a Swiss bank (through Swiss online trading platforms, for example). Make sure to compare the brokerage and custody fees. In some cases, a specific mutual fund will only be available from the bank that manages it.
• Costs: The TERs of mutual funds are often much higher than those of passively-managed funds like ETFs.
• Security: Swiss mutual funds are generally secure. Fund shares are treated as segregated assets in the event of a Swiss custodian bank going bankrupt.
• Risks: Apart from market developments, the way in which a mutual fund is managed and the investment decisions it makes determine how risky it is for investors. An advantage of mutual funds is that if the market takes a downturn, the fund’s managers can intervene and sell investments to avoid losses. The disadvantage is that mutual funds can potentially lose more money than passively-managed funds.
• Potential returns: Theoretically there is a chance that a mutual fund could achieve higher returns than an ETF or index fund that invests in similar assets. In practice though, that is rarely the case. The comparably high fees charged by mutual funds also negatively impact your returns. For these reasons, using passively-managed funds is generally preferrable to using actively-managed mutual funds. You can find more information in this moneyland.ch guide.  

Traditional asset management

• How it works: If you cannot manage your investments yourself, or prefer not to, then you can have a professional asset management service do it for you. In Switzerland, asset management services are offered by over 2000 independent asset managers in addition to banks. Most Swiss retail banks also offer asset management services. You can choose between a discretionary mandate that gives the asset manager permission to make investment decisions for you, and an advisory mandate by which you receive advice about how to invest, but make decisions yourself.
• How to invest: Mandating a Swiss asset management service provider to manage your wealth or give you investment advice is easy. Just pay attention to the minimum asset requirements. Traditional Swiss asset management services generally target wealthy clients and have high requirements. But in addition to Swiss private banks for wealthy individuals, Swiss retail banks also offer asset management services to the general public. The asset management comparison on moneyland.ch lets you compare asset management offers from retail banks based on your preferred investment strategy and the amount you plan to invest.
• Security: The Swiss bank depositor protection scheme covers bank account balances, but not securities (with the exception of medium-term notes). So the way in which your money is invested determines whether or not it is secured against the risk of bank failures. It is also essential to use only reputable asset management services. Cases of fraudulent asset managers do occur in Switzerland too.
• Investment costs: Many companies charge a flat fee as a percentage of your assets under management. This flat fee covers the asset management service, but often does not cover third-party costs like the TERs of funds used for investments. The moneyland.ch guide to the costs of using Swiss asset management services provides more information.

The fees charged by traditional asset managers are often very high. It is much cheaper to invest in securities yourself using a Swiss online trading platform, or to use a cheap Swiss online asset management service.

• Risks and potential returns: Your investment risk and potential returns vary depending on your preferred investment strategy, and on the investment costs. Many traditional Swiss asset managers actively manage investments, which generates more costs.

Online asset management services (robo advisors)

• How it works: Robo advisors – or online asset management services – are usually cheaper than conventional asset managers. These digital asset management services typically use automated processes to invest your money. While traditional asset management services often have high minimum financial requirements, you can begin using online asset management services with as little as 500 francs.
• How to invest: Opening an asset management account with a robo advisor is simple, and can be done online. Minimum financial requirements vary between service providers.
• Investment costs: The asset management fees are usually much lower than those charged by traditional asset managers. You can find an overview of the fees charged by Swiss asset management services in the guide to Swiss robo advisors.
• Security: Only bank account balances are covered by Swiss bank depositor protection. Whether or not your wealth is protected in the case of a bank failure, and how, depends on how the robo advisor invests your money. Most digital asset management services invest in passive funds like ETFs. These shares remain yours even if the Swiss asset management service or custodian bank goes bankrupt.
• Risks: The investment risk depends on the investment portfolio used. Swiss online asset management services typically invest in stocks using stock ETFs. As with other stock investments, there is a risk of your assets losing value, especially in the short term.
• Potential returns: The potential returns vary depending on the investment portfolio used, and on the investment costs.

Precious metals

• How it works: There are a number of ways to invest in gold, silver, platinum, and palladium in Switzerland. In addition to buying physical precious metal bullion, you can also invest using precious metal ETFs, or precious metal accounts from Swiss banks.
• How to invest: You can buy physical bullion from Swiss precious metal dealers, and from many Swiss banks. Alternatively, you also have the option of opening precious metal accounts at many Swiss banks. Depending on the bank, these may only be offered in conjunction with a private account. You can also invest in precious metals by buying shares in a Swiss precious metal ETF. In order to do this, you must have a stock brokerage account. You can find detailed information in the moneyland.ch investment guides for gold, silver, platinum, and palladium.
• Investment costs: The cost of investing depends on how you choose to invest. When you buy physical precious metal, you pay a markup on the spot price, as well as possible ongoing secure storage costs. Additionally, you pay Swiss VAT when you buy silver, platinum, and palladium.

If you buy shares in a precious metal ETF, then you have to account for both the fund’s fees and the brokerage and custody fees charged by your bank or online trading platform. Precious metal accounts have ongoing account fees. You can find more information in the moneyland.ch guide to precious metal accounts.

• Security: When you invest in physical precious metal bullion, then the security of your investment depends on how safely these assets are stored. Precious metal accounts are only covered by Swiss bank depositor protection if the account agreement gives you the right to demand repayment of your account balance in fiat currency. Shares in ETFs are securities, and are not covered by bank depositor protection. However, they are segregated and remain in your possession if your custodian bank goes bankrupt.
• Risks: Gold in particular has the reputation of being a safe investment during times of crisis. But that does not detract from the fact that precious metal prices are very volatile. The prices of silver, platinum, and palladium – metals which are widely used in manufacturing – are particularly prone to fluctuations. The possibility of your investment losing money over the long term cannot be ruled out.
• Potential returns: Both high returns and high losses are possible, even over short investment terms, depending on how the market moves.

Real estate

• How it works: Swiss real estate has a reputation for maintaining its investment value. Buying a house or apartment in Switzerland requires a large amount of capital. However, you can also invest in Swiss real estate using stocks and real estate funds. You can buy shares in these using a stock brokerage account from a Swiss bank. In addition to Swiss residential properties, Swiss real estate funds may also invest in Swiss business properties, office buildings, and retail centers.
• How to invest: Apart from buying property in Switzerland directly, you can also invest in Swiss real estate by buying shares in real estate companies or in real estate ETFs. In order to buy these shares, you need to have a stock brokerage account.
• Investment costs: When you buy property in Switzerland, you pay a number of fees and taxes. These include notary fees, land registry fees, and various other charges. Depending on which canton the property is in, you may also pay a real estate transfer tax. None of these fees apply when you invest in real estate company stocks or in real estate ETFs.
• Security: When you own a property, you hold a physical investment, so location, buildings insurance, and proper maintenance are more relevant than bank depositor protection. You can find out how shares in Swiss real estate companies and real estate funds are protected in the guide to bank failures in Switzerland.
• Risks: While Swiss real estate prices have almost only gone up in recent years, there is no sure guarantee that Swiss property will continue to gain value, or at least maintain its value. You can find more information about things to pay attention to when buying property in Switzerland here.
• Potential returns: Demand for Swiss real estate is high. According to statistics from the Federal Statistical Office, property prices went up by 17 percent between the end of 2019 and the end of 2023. Those figures show that it is possible to achieve a substantial return by investing in Swiss property. Swiss real estate ETFs can also potentially yield high returns. But there is also a risk of making substantial losses.  

Alternative investments

• How it works: Some investors also use alternative investments like fine art, classic cars, gemstones, jewelry, watches, whisky, or wine. In order to invest successfully, you must have a founded knowledge of the individual market. Depending on the asset in question, you may also need to have a large amount of investment capital, and a lot of patience. In order to buy certain luxury watches, for example, you have to sign up to a waiting list well in advance.
• How to invest: Reputable dealers that specialize in the asset in question are generally a good place to start. Buying items online or from private individuals is risky and requires exceptional caution. An alternative to buying assets directly is to buy shares in companies which play a role in the production or trade in the asset in question. You can also invest in alternative asset classes using thematic ETFs and index funds.
• Investment costs: Fees can vary greatly depending on the asset in question and on which dealer you use. The Swiss VAT generally applies. You should also consider the costs of properly storing your assets. If you invest using stocks and funds, then the previously-mentioned costs apply.
• Security: If you buy actual material assets, then the security of your investment largely depends on whether or not it is stored correctly. Getting valuables insurance for very valuable items is worth considering.
• Risks: The risk of losing money on alternative investments is high. There is no guarantee that items will gain in value. You should only invest in things that you understand well.
• Potential returns: If you have a founded knowledge of items and markets, and some luck, then theoretically you can achieve high returns. But making huge losses is also possible.

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