I think it’s great how phone-based banks have blown a breath of fresh air into the world of banking. With uncomplicated apps and low prices, these services are snatching customers right out from under the noses of the established old-timers. I can now plan and manage my voluntary retirement savings completely on my phone. Pillar 3a investment apps like Frankly and Viac are vying for customers.
I have been saving money using the pillar 3a for many years now. This lets me save for my old age on the one hand, while also saving on taxes in the here and now.
I began my ongoing experiment in December, 2020. At the time, I opened accounts with six different retirement saving apps, and deposited 500 francs into each of these accounts. I specifically chose six retirement apps which I could open and use without any additional requirements or needing to open other kinds of accounts as well. One of the original six apps has disappeared from the market in the meantime, so I had to continue my experiment using the remaining five service providers.
On December 10, 2020, I deposited 500 francs into each pillar 3a investment app. In December 2021, I transferred another 500 francs to each. I repeated this action in December 2022 as well. In total, I transferred 1500 francs into each of the pillar 3a investment apps included in my experiment.
2022 was a tough year for the stock market, so the balances of all five investment accounts are lower than the 1500 francs I paid in. That doesn’t worry me much though, as I still have some years to go before I hit retirement age, and I expect those losses to recover in the meantime.
Table: Account balances on January 12, 2023
| Service provider |
Balance |
Return |
| Frankly (Zürcher Kantonalbank) |
1488 |
-0.8% |
| Viac |
1486 |
-0.9% |
| Descartes Vorsorge |
1468 |
-2.1% |
| Selma |
1467 |
-2.2% |
| Finpension |
1462 |
-2.5% |
The differences are not as pronounced as they were last year, but they are still substantial. As in January 2022, Frankly took the gold in this year’s results as well.
Of course, my ongoing experiment is no scientific comparison. It is perfectly possible that differences in returns could simply result from different service providers investing my money on different schedules. Then there is the fact that the experiment has only been running for a relatively short period of time, as far as investments go.
But my little experiment does at least show that it does matter which retirement saving app you use. Of course, I will continue to keep the experiment alive by making my annual transfers to the retirement apps – and get back to you with the next update in good time.
As always, it goes without saying that past performance does not reveal anything about how your fortune will develop in the future. I would never advise anyone to move all their pillar 3a savings to Frankly just because that app happened to perform well over the past few years.
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