Finding the best pillar 3a in Switzerland
Choosing the best pillar 3a in Switzerland can save you thousands of francs over your working life. The difference between a high-cost provider charging 1.2% annually and a low-cost option at 0.39% compounds dramatically over 30 years. On CHF 200,000 accumulated, that's roughly CHF 1,600 versus CHF 780 in yearly fees, money that should be growing for your retirement, not disappearing into management costs.
Having built and exited businesses in Switzerland, I've learned that financial products rarely deserve the complexity they're sold with. Pillar 3a comparison comes down to a few key variables: fees, investment options, and your personal time horizon. Everything else is marketing.
What is pillar 3a and why does it matter?
Pillar 3a is Switzerland's voluntary, tax-advantaged private retirement savings scheme. It sits alongside the mandatory AHV/AVS (first pillar) and occupational pension (second pillar) to form the Swiss three-pillar system.
The core benefit is immediate tax savings. Contributions reduce your taxable income directly. For someone in Zurich earning CHF 120,000 annually, contributing the 2025 maximum of CHF 7,056 saves approximately CHF 2,000-2,500 in taxes that year. Over a 30-year career, that's CHF 60,000-75,000 in tax savings alone, before any investment returns.
Key pillar 3a facts for 2025:
- Maximum contribution for employed persons with pension fund: CHF 7,056
- Maximum for self-employed without pension fund: 20% of net income, up to CHF 35,280
- Contributions deadline: December 31st of each year
- Withdrawal: Earliest 5 years before AHV retirement age (currently 59 for women, 60 for men)
- Taxation on withdrawal: One-time reduced rate, separate from regular income
The Swiss Federal Social Insurance Office (BSV/OFAS) sets these limits annually, typically adjusting for inflation.
Two types of pillar 3a products
3a savings accounts
3a savings accounts offer guaranteed capital with modest interest rates. Your money stays secure, but growth is limited. Current rates range from 0.5% to 1.25% annually across Swiss banks.
Choose savings accounts if:
- You're within 5-10 years of retirement
- You cannot tolerate any capital loss
- You prefer simplicity over optimization
Traditional banks like UBS, PostFinance, and cantonal banks dominate this category. Interest rates barely outpace inflation, meaning real purchasing power growth is minimal. For comparison context on regular savings options, see our savings account comparison.
3a investment funds (securities-based)
3a investment funds invest your contributions in stocks, bonds, and other assets. These carry short-term volatility but historically deliver superior long-term returns, critical for retirement savings spanning 20-40 years.
Choose investment funds if:
- You have 10+ years until retirement
- You understand that short-term losses are normal
- You want your money working harder for your future
The data is clear: over 20+ year periods, diversified equity portfolios have consistently outperformed savings accounts. A CHF 7,056 annual contribution growing at 5% annually versus 1% creates a difference of approximately CHF 180,000 over 30 years. That's the real cost of choosing the "safe" option when you have time on your side.
Key factors for pillar 3a comparison
Total Expense Ratio (TER)
TER represents the annual cost of managing your investment fund, expressed as a percentage. It includes management fees, custody fees, and administrative costs. Lower TER means more of your money compounds over time.
Typical TER ranges in 2025:
- Low-cost digital providers (Finpension, VIAC): 0.39-0.49%
- Mid-range providers (frankly, Selma): 0.45-0.65%
- Traditional banks: 0.80-1.50%
On CHF 100,000, the difference between 0.39% and 1.20% TER equals CHF 810 annually. Over 20 years with compounding, that gap widens to tens of thousands of francs.
Investment strategy and allocation
Most providers offer equity allocations from 0% to 99%. Higher equity exposure means more volatility but higher expected returns over long periods.
General allocation guidance by time horizon:
- 20+ years to retirement: 80-99% equities
- 10-20 years: 60-80% equities
- 5-10 years: 40-60% equities
- Under 5 years: Consider savings account or low-equity allocation
Passive index strategies (tracking market indices) typically outperform active management after fees. Most evidence-based investors prefer providers using index funds rather than actively managed portfolios.
Performance track record
Historical performance doesn't guarantee future results, but 3-5 year track records help evaluate fund quality and strategy consistency.
What matters in performance data:
- Comparison against benchmark indices (not just absolute returns)
- Performance after fees (net returns)
- Consistency across different market conditions
Funds with the lowest costs typically deliver the best long-term net performance because fees compound against you every year.
Provider features and flexibility
Beyond costs, consider:
- Number of accounts allowed: Multiple accounts (typically 2-5) enable staggered withdrawals, optimizing taxes at retirement
- Contribution flexibility: Some providers allow irregular contributions throughout the year
- Digital experience: Mobile apps, reporting quality, and ease of transactions
- Sustainability options: ESG or sustainable investment strategies if important to you
- Transfer fees: Costs to move your 3a to another provider (should be CHF 0)
Common pillar 3a mistakes to avoid
Mistake 1: Choosing your regular bank by default
Most people open 3a accounts where they already bank, convenient but often expensive. Traditional banks typically charge 2-3x more than specialized digital providers for comparable products. Loyalty to your bank costs real money here.
Mistake 2: Staying in cash when you have decades ahead
A 30-year-old keeping pillar 3a in a savings account sacrifices potentially hundreds of thousands in growth. Yes, markets fall temporarily. No, this doesn't matter when you can't touch the money for 30+ years anyway.
Mistake 3: Ignoring the withdrawal strategy
Opening a single 3a account seems simpler, but you'll regret it at retirement. Swiss tax law taxes pillar 3a withdrawals separately from income, but if you withdraw everything in one year, you pay a higher marginal rate on that lump sum.
The solution: Open 3-5 accounts over your career, then withdraw one per year in retirement. Each withdrawal is taxed at a lower rate because the amounts are smaller individually.
Mistake 4: Forgetting to contribute by December 31st
Pillar 3a contributions must hit your account by December 31st to count for that tax year. There's no extension. Set a calendar reminder for early December and contribute your maximum. Missing a year means losing that year's tax deduction forever, you cannot "catch up" later.
When to consider switching providers
Switching pillar 3a providers is straightforward and free in most cases. Consider moving if:
- Your current provider charges significantly higher fees
- You want to consolidate multiple accounts
- Your current provider lacks investment options you need
- Service quality has declined
Transfer process: Notify your new provider, they handle the transfer request. Typical timeline: 2-4 weeks. Securities transfer in-kind, though some providers require liquidation (selling your current investments and re-buying in the new account).
Pillar 3a for special situations
Self-employed without pension fund
If you're self-employed and not affiliated with a pension fund, your maximum contribution increases to 20% of net earned income, up to CHF 35,280 annually. This higher limit makes pillar 3a even more valuable for entrepreneurs and freelancers.
Leaving Switzerland
If you leave Switzerland permanently, you can withdraw your pillar 3a before retirement age. Taxation depends on your destination country and bilateral agreements. Withdrawals to EU/EFTA countries face Swiss withholding tax (varies by canton of the foundation, typically 5-10%) that may be reclaimable depending on your new country's tax treaty with Switzerland.
The Federal Tax Administration (ESTV/AFC) provides guidance on international taxation scenarios.
Early withdrawal scenarios
Besides leaving Switzerland, early pillar 3a withdrawal is possible for:
- Purchasing primary residence in Switzerland
- Starting self-employment
- Full disability (IV/AI benefits)
- Every 5 years while self-employed
Each withdrawal triggers taxation, so planning matters.
My take: What I actually use
After analyzing dozens of options, I split my pillar 3a across multiple accounts with low-cost providers using passive equity strategies. My reasoning:
- Fees matter most over 25+ years, I prioritize providers under 0.45% TER
- High equity allocation makes sense when withdrawal is decades away
- Multiple accounts set up the staggered withdrawal strategy from day one
- Index funds over active management, the data consistently supports this approach
This isn't financial advice for your situation. Someone 55 years old should think very differently than someone at 30. But for long time horizons, the math clearly favors low-cost equity investment over savings accounts.
How we evaluate pillar 3a products
Our comparison methodology focuses on objective, measurable factors:
Fee analysis
We calculate total costs including TER, account fees, and any hidden charges. All-in cost comparison reveals true expense differences.
Performance assessment
We track net returns after fees against appropriate benchmarks, evaluating risk-adjusted performance across market cycles.
Feature comparison
We assess investment options, digital tools, customer service quality, and flexibility for different user needs.
Provider stability
We consider regulatory compliance (FINMA supervision), company backing, and operational track record.
For detailed comparisons by product type, explore our best 3a savings accounts and best 3a investment funds analyses.
Frequently asked questions
What is the best pillar 3a in Switzerland?
The best pillar 3a depends on your time horizon and risk tolerance. For long-term investors (10+ years), low-cost investment fund providers like Finpension or VIAC typically offer the best combination of fees and investment options. For conservative savers near retirement, cantonal banks and PostFinance provide competitive savings account rates with guaranteed capital.
What is the pillar 3a maximum for 2025?
The 2025 pillar 3a maximum is CHF 7,056 for employed persons with a pension fund. Self-employed individuals without a pension fund can contribute up to 20% of net income, maximum CHF 35,280. These limits are set annually by Swiss authorities and typically increase slightly each year.
Should I choose a 3a savings account or investment fund?
Choose investment funds if you have 10+ years until retirement and can accept short-term volatility for higher expected long-term returns. Choose savings accounts if you're within 5-10 years of retirement, cannot tolerate any capital loss, or prefer guaranteed capital over growth potential.
Can I have multiple pillar 3a accounts?
Yes, you can have multiple pillar 3a accounts with different providers. This is actually recommended for tax optimization, withdrawing from separate accounts in different years at retirement keeps each withdrawal in a lower tax bracket. Most people benefit from 3-5 accounts by the time they retire.
How do pillar 3a fees compare between providers?
Pillar 3a fees range from approximately 0.39% to 1.50% annually (TER) for investment funds. Digital providers like Finpension and VIAC charge the lowest fees (0.39-0.49%). Traditional banks typically charge 0.80-1.50%. Savings accounts don't charge management fees but offer lower interest rates, often resulting in negative real returns after inflation.
What happens to pillar 3a if I leave Switzerland?
If you leave Switzerland permanently, you can withdraw your pillar 3a early. A withholding tax (5-10% depending on the canton where your 3a foundation is located) applies. This tax may be reclaimable in your new country of residence depending on tax treaty provisions. EU/EFTA departures have different rules than non-EU destinations.
When can I withdraw pillar 3a?
You can withdraw pillar 3a 5 years before standard AHV retirement age (currently age 59 for women, 60 for men) or later. Early withdrawal is possible for specific reasons: purchasing primary residence, starting self-employment, leaving Switzerland permanently, or full disability. Each withdrawal is taxed at a reduced rate separate from regular income.
Is VIAC or Finpension better?
Both VIAC and Finpension offer excellent value with similar low fees (around 0.40% TER). Differences lie in specific fund options, user interface preferences, and additional features. Both use passive index strategies and allow high equity allocations. The "best" choice depends on personal preference, both are among Switzerland's top pillar 3a providers.