Last update: 07.10.2024 17:36
In our 2024 vested benefits account comparison for Switzerland, we take a look at large and attractive new providers for vested benefits accounts or vested benefits custody accounts. Discover in the article which criteria you should consider in the vested benefits account comparison and find the right provider for you.
What is a vested benefit?
The vested benefits are money from your occupational pension fund that your previous pension fund pays out if you leave your job and do not yet have a new employer. There can be various reasons for this – such as unemployment, moving away from Switzerland, self-employment or early retirement. So far, so good. The only problem is that your pension fund has to “get rid” of your money within 6 months. It therefore pays the FC benefit into one of three possible solutions with a provider of your choice: a vested benefits account, a vested benefits policy or a vested benefits custody account. You can find out more about vested benefits in the in-depth article. There we also explain when a vested benefits policy, vested benefits account or vested benefits custody account is a good choice. We advise against an FC policy.
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Criteria for the vested benefits account comparison 2024
Ok, you need a vested benefits account comparison? From our point of view, the following criteria are important.
“More is better.” You can proceed according to this motto in the pure vested benefits account comparison. But unfortunately, most providers still offer mini-interest rates here. They take advantage of the fact that you don’t know exactly when you will have to put your money back into a new pension fund. That’s why the interest rates are often even lower than on a savings account. Therefore, the higher the better. However, also pay attention to the costs of the vested benefits account.
“Free beats fees” – There are numerous good providers in the 2024 vested benefits account comparison that offer free account management and do not charge any fees for closing the account. Most providers charge around CHF 200 – 500 if you want to withdraw your vested benefits for home ownership.
But we think that an offer is no longer in keeping with the times if the provider fobs you off with low interest rates on the one hand and then charges you fees for the account on the other. We are just as unconvinced by providers who link an FC custody account to other fee-based banking services.
“Choose low-tax cantons”. Why the heck is the domicile of the vested benefits foundation relevant in the vested benefits account comparison? Well, when your vested benefits are paid out, it depends on WHERE you are domiciled:
- Do you live in Switzerland? Then the capital tax comes into play. It depends on your place of residence. You can find out more about capital tax in this article.
- Have you moved away from Switzerland? If you are no longer liable for tax in Switzerland, you will be subject to withholding tax. It depends on the domicile of the foundation where you have your vested benefits assets. The canton of Schwyz has the lowest withholding tax. You can find out more about withholding tax on lump-sum withdrawals in this article(coming soon). First of all: with a foundation domiciled in Schwyz, you save a factor of 2 in taxes compared to a foundation domiciled in Basel!
If investing in a vested benefits custody account is a good solution for you, you should consider whether your money should be invested according to ESG criteria, impact investing or simply in the traditional way. I recommend this article on the differences.
With a long investment horizon, the level of the equity allocation and the costs have an extreme impact on your returns and therefore your assets later on. With low costs and a passive investment strategy, you will fare better over a long period of time.
Unlike in pillar 3a, investments in the BVG mandatory scheme are limited to a maximum equity ratio of 85%. This is why many providers only offer strategies with an equity quota of 75% (e.g. Migros, PostFinance) or 80%, as a higher equity quota is only permitted in the extra-mandatory pension plan.
How secure are my vested benefits? Quite. But there are also differences and subtleties. We take a closer look at them in an article.
In a nutshell: while securities in a vested benefits custody account belong to you and are therefore not affected by the bankruptcy of the foundation or bank, deposits in a vested benefits account are subject to the deposit protection of the banks. These are “only” protected up to CHF 100,000 per customer and bank. Unless you have a bank with a state guarantee, in which case the canton is liable for investors’ losses without limit. This applies to all cantonal banks with the exception of Vaud, Bern and Geneva. Therefore, pay attention to the deposit protection in the vested benefits account comparison.
Vested benefits account provider comparison and vested benefits custody account comparison
So, by now you know what vested benefits are and that you should convert them into a vested benefits account or a vested benefits custody account. So how do I find a vested benefits account provider? In our big comparison, we have taken a close look at the most important players.
We compare the interest on the vested benefits account, the costs of the vested benefits account, the location of the foundation, the possibility of investing money sustainably and the costs for the vested benefits custody accounts (flat fee or minimum and maximum fee for different investment strategies).
You can filter and sort the table and scroll to the right to discover more details. For providers with a link, we receive a small commission if you use our code when opening an account.
Vested benefits account provider comparison table
Notice
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Open finpension vested benefits with a 25 franc bonus now
We even use finpension for our own vested benefits. Use the code SMLUTQ for your welcome bonus when opening an account. You will receive this as a fee credit if you deposit or transfer at least CHF 1,000 within 12 months. And you save for a lifetime thanks to the very low fees.
Transferring vested benefits
Similar to pillar 3a, you can also change providers at any time with vested benefits. The system of free choice of provider is intended by law. You can simply fill out a transfer form with the provider of your choice and they will withdraw your vested benefits assets from the previous provider for you. The transfer itself is free of charge; please note that only money is transferred. Securities are sold before a transfer.
The transfer of vested benefits assets can be very worthwhile in the following cases, for example:
- Interest differential on the vested benefits account
- Change from a pure account solution to a vested benefits custody account
- Fee difference in the investment products
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frankly Vested Benefits is a relatively new product with which ZKB wants to grow in another market. Find out whether the offer is worthwhile for you and benefit from a switching bonus with our frankly code SMOLIO.
Summary of vested benefits account comparison and vested benefits custody account comparison
With a vested benefits account or vested benefits custody account, you can "park" money from your occupational benefit scheme - either until you re-join an employer or until you can withdraw the money properly, e.g. for retirement. In the vested benefits account comparison, we have explained the criteria that are important when making your choice.
We think: first decide whether the money should be invested for the short or long term. For short-term investments, we recommend a vested benefits account. When choosing an account, you should preferably choose a provider with high interest rates, free account management and a state guarantee for deposits.
For a longer horizon, a custody account solution often makes sense. This is significantly more expensive with traditional banks than with specialized pension providers. In our research, we also had to look longer for the fee schedules, the costs for the investment strategy or the interest rate for the vested benefits account. We only found these well hidden on the website - usually for good reason.
Similar to pillar 3a, we consider finpension to be an excellent choice for a vested benefits custody account. They impress with their foundation domicile, low flat fee, great app and various index strategies from 3 fund houses. frankly from ZKB and FreeMe from Glarner Kantonalbank are interesting as vested benefits accounts. They score points with interest, a free account and a state guarantee.
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Disclaimer
We have taken great care with the content of this article. Nevertheless, we cannot rule out errors and cannot guarantee that it is correct and complete. This article is not a substitute for advice. We do not offer investment or tax advice and recommend that tax issues are always clarified with an expert and/or the relevant cantonal authority. We accept no liability whatsoever.
