Bank vs. insurance: What they have in common
Before you weigh up the differences between banks and insurance in pillar 3a, you should know what the two solutions have in common:
- You can use both solutions to save for your old age.
- With both solutions, you can deduct a certain amount from taxes.
- Your money is restricted in the case of both solutions. You can only have your pillar 3a credit paid out prematurely if you are acquiring residential property, taking up self-employment or leaving Switzerland for good.
- In both solutions, you can invest your retirement assets in funds and benefit from higher returns.
Bank vs. insurance: The differences
|Risk protection||No protection||Protection in the event of disability and death|
||Maximum flexibility with respect to deposit amount (up to the maximum contribution)||Limited flexibility|
|Contract period||No defined term||Contractual term, generally until retirement|
|Retirement assets||Everything that is paid in, minus payment commission (depending on investment), fund costs or custody fees||Premiums for the insurance coverage are deducted from the retirement assets. Acquisition costs and management costs also apply|
|Achievement of saving goal||Depends on personal discipline and whether you are in employment||100%, even in the event of disability|
We take a closer look at the differences below.
Risk protection Insurance – security thanks to a contract
Bank – flexibility in terms of deposits
If you open your pillar 3a with a bank, you are not obliged to pay a certain amount into your pillar 3a. Taking into account the maximum amount, you decide independently how much money you pay in each year, and anything that you pay in will be available to you after retirement. You can open several bank accounts or custody accounts and split up the amounts. With our pension funds 3a for example, you can combine bank and securities saving and take advantage of higher return opportunities. In addition, you can optimize taxes in this way if you close your pension accounts gradually from the age of 60. Further information on this can be found in the article "Pillar 3a: Save taxes on withdrawals".
While you are more flexible with a bank solution, you also have to be more disciplined to achieve your saving goals. In addition, you and/or your family will not be protected against the financial consequences of disability or death. If you are no longer able to work, you are no longer allowed to pay into pillar 3a.
Contract period Insurance – fixed term
Bank – no fixed term
Conclusion: Insurance vs. bank solution
What better suits your requirements? If you consider security to be crucial, you should choose an insurance solution. If you wish to save flexibly, you should choose a bank solution.
Our tip: Do the one but don't reject the other! Insurance and bank solutions can be combined with each other. We offer a wide range of retirement provision solutions. You can also take out a disability pension and/or term life insurance separately. In this way, you can deduct these risk premiums from your taxes.