Here's a number that might change how you think about money: CHF 10,000 invested today at 5% annual returns becomes CHF 43,219 in 30 years. Without adding a single franc. That's the compound interest effect doing the heavy lifting while you sleep.
But here's what most calculators won't tell you: the real question isn't just "how much will I have?" but "will it be enough?" That's why we built this calculator with a Financial Independence indicator. It shows you not just the destination, but whether you'll actually get where you want to go.
What is Compound Interest? (The Simple Version)
Compound interest is when your money earns interest, and then that interest earns interest too. It's essentially your money making money, which then makes more money.
The difference from simple interest:
- Simple interest: You earn 5% on CHF 10,000 = CHF 500/year, forever
- Compound interest: Year 1 you earn CHF 500, Year 2 you earn 5% on CHF 10,500 = CHF 525, and so on
The formula looks intimidating (Vf = Vi × (1 + r/n)^(n×t)), but you don't need to understand it. That's what this calculator is for. Just plug in your numbers and let the math do its thing.
How to Use This Calculator
This is your initial capital. Maybe it's CHF 5,000 you've saved, an inheritance, or your current savings account balance. If you're starting from zero, that's fine too.
How much can you realistically invest each month? Be honest with yourself. CHF 100/month is better than CHF 500/month that you'll abandon after three months. Consistency beats intensity.
This is where people get tripped up. Here are realistic benchmarks for Switzerland:
- Swiss savings accounts: 0.5% to 1.5%
- Pillar 3a savings accounts: 0.5% to 1.25%
- Pillar 3a investment solutions: 3% to 7%
- Global stock market (long-term): 6% to 8%
How long until you need this money? For retirement planning, think 20 to 40 years. For a house down payment, maybe 5 to 10 years.
Swiss Interest Rate Benchmarks (2026)
Let's be realistic about returns in Switzerland. Here's what you can actually expect:
| Investment Type | Expected Return | Risk Level |
|---|---|---|
| Savings accounts | 0.5% - 1.5% | Very low |
| Pillar 3a savings | 0.5% - 1.25% | Very low |
| Pillar 3a investment funds | 3% - 7% | Medium |
| Swiss bonds | 1% - 3% | Low |
| Global ETF portfolio | 5% - 8% | Medium-high |
| Pure equity portfolio | 6% - 10% | High |
The Financial Independence Indicator
Most compound interest calculators stop at "here's your future balance." Ours goes further.
The Financial Independence Indicator answers a more useful question: when could your investments generate enough passive income to cover your living costs?
Here's how it works:
- Enter your annual living costs (what you spend per year)
- Set a safe withdrawal rate (typically 3% to 4%)
- Add your current age
The calculator then shows you:
- How many years until your portfolio could sustain your lifestyle
- What age you'd reach financial independence
- Your estimated monthly passive income at the end
I added this feature because it's the question I kept asking myself. "CHF 500,000 sounds great, but what does it actually mean for my life?" The answer depends entirely on your spending. For someone spending CHF 40,000/year, that's 12+ years of runway. For someone at CHF 100,000/year, it's barely 5.
What's a Safe Withdrawal Rate?
The "safe withdrawal rate" (SWR) is the percentage you can withdraw annually without running out of money. The famous Trinity Study from 1998 suggested 4% works for 30-year retirements.
More conservative planners use 3% to 3.5%, especially for:
- Early retirees (longer time horizons)
- People in Switzerland (higher cost of living)
- Those who want extra buffer
Pro tip: A 4% withdrawal rate means you need 25x your annual expenses. At 3%, you need 33x. That's the math behind "the number" everyone talks about.
Compound Interest for Swiss Pillar 3a
The Pillar 3a is one of the best vehicles for compound growth in Switzerland. Here's why:
Tax deduction on contributions You can deduct up to CHF 7,258 (2026 limit for employees) from your taxable income. At a 30% marginal rate, that's CHF 2,177 in immediate tax savings.
Tax-free growth No wealth tax, no capital gains tax, no dividend tax while the money compounds. This is huge over 30+ years.
Forced long-term thinking You can't touch it until age 59/64 (with some exceptions). This prevents the biggest enemy of compound growth: yourself pulling money out early.
Pillar 3a: Savings Account vs. Investment Solution
Here's the uncomfortable truth: a Pillar 3a savings account earning 0.75% will barely keep up with inflation.
Run the numbers yourself:
- CHF 7,000/year for 30 years at 0.75% = ~CHF 240,000
- CHF 7,000/year for 30 years at 5% = ~CHF 490,000
That's CHF 250,000 difference. The tax deduction is the same either way. The only variable is whether you let your money actually work.
Real Examples with Swiss Numbers
Example 1: The Early Starter
Profile: 25 years old, starting with CHF 5,000, investing CHF 300/month until age 65
| Scenario | Return | Final Value | Interest Earned |
|---|---|---|---|
| Savings account | 1% | CHF 178,000 | CHF 29,000 |
| Pillar 3a fund | 5% | CHF 458,000 | CHF 309,000 |
| Equity portfolio | 7% | CHF 793,000 | CHF 644,000 |
The difference between 1% and 7% over 40 years? CHF 615,000. That's not a typo.
Example 2: The Late Starter
Profile: 45 years old, starting with CHF 50,000, investing CHF 1,000/month until age 65
| Scenario | Return | Final Value | Interest Earned |
|---|---|---|---|
| Savings account | 1% | CHF 317,000 | CHF 27,000 |
| Pillar 3a fund | 5% | CHF 449,000 | CHF 159,000 |
| Equity portfolio | 7% | CHF 573,000 | CHF 283,000 |
Even with less time, the 45-year-old with CHF 50,000 starting capital ends up with nearly as much as the 25-year-old at 5% returns. Starting capital matters too.
Example 3: Financial Independence Target
Profile: 35 years old, CHF 60,000 annual expenses, 4% withdrawal rate, CHF 20,000 starting, CHF 2,000/month
Target portfolio needed: CHF 1,500,000 (60,000 × 25)
At 6% returns: ~22 years to reach target (age 57)
That's the math behind early retirement in Switzerland. Aggressive? Yes. Impossible? No.
Common Mistakes That Kill Compound Growth
Time in the market beats timing the market. Every year you delay costs you more than any market dip will.
A 1.5% annual fee vs. a 0.3% fee seems small. Over 30 years on CHF 500,000, that's a difference of CHF 180,000. Read that again.
Selling when markets drop locks in losses and destroys the compound effect. The money you pull out can never compound again.
Projecting 12% annual returns will leave you disappointed and possibly short of your goals. Use 5% to 7% for equity-heavy portfolios.
Compound Interest vs. Inflation
Here's the thing nobody wants to talk about: inflation eats your returns.
If you earn 5% but inflation is 2%, your real return is only 3%. Switzerland has historically had low inflation (averaging around 1% over the past decade), but 2022-2023 reminded us that can change quickly.
What this means for your calculations:
- A "safe" savings account at 1% with 2% inflation = losing purchasing power
- You need returns above inflation just to stay even
- This is why keeping large amounts in cash long-term is actually risky
The Swiss National Bank targets inflation around 0-2%. Factor this into your planning. If you're projecting 5% nominal returns, your real return might be 3-4%.
Compounding Frequency: Does It Matter?
Short answer: not as much as you think.
CHF 10,000 at 5% for 10 years:
- Annual compounding: CHF 16,289
- Monthly compounding: CHF 16,470
- Daily compounding: CHF 16,487
The difference between annual and daily is CHF 198 over a decade. Focus your energy on the interest rate and your contribution amount instead. Those move the needle far more.
Frequently Asked Questions
How much interest will I earn on CHF 100,000 in Switzerland?
It depends entirely on where you put it. A savings account at 1% yields CHF 1,000/year. A diversified investment portfolio averaging 5% yields CHF 5,000/year. Over 10 years with compounding, that's the difference between CHF 110,462 and CHF 162,889.
Is compound interest the same as compound returns?
Technically no. "Interest" refers to fixed-rate products (savings accounts, bonds), while "returns" includes variable gains from investments. In practice, people use "compound interest" for both. Our calculator works for either scenario.
What's a realistic return for Swiss Pillar 3a investments?
For Pillar 3a investment solutions with 60-80% equities, expect 4-6% average annual returns over 20+ years. Some years will be negative. The key is staying invested through the volatility.
How accurate is this calculator?
It's a projection tool, not a crystal ball. Actual returns will vary year to year. Use it for planning and goal-setting, not as a guarantee. The longer your time horizon, the more likely you'll approach the projected average.
Should I pay off debt or invest for compound growth?
Generally, pay off high-interest debt first (credit cards, personal loans above 5%). For low-interest debt like Swiss mortgages (2-3%), the math often favors investing, but it depends on your risk tolerance and tax situation.
Can compound interest make me rich?
It can build significant wealth over time, but it won't make you rich quick. The magic requires decades. CHF 500/month at 6% for 30 years = CHF 502,000. That's life-changing money, but it takes patience.
Tips to Maximize Your Compound Growth
Start today, not next month Every month you delay costs you. Even if you can only invest CHF 50, start now and increase later.
Automate everything Set up automatic transfers to your Pillar 3a or investment account. Remove the decision from each month. You can't spend what you don't see.
Minimize fees relentlessly Compare providers. A Pillar 3a charging 1.2% vs. one charging 0.4% will cost you tens of thousands over your investment lifetime. This is one of the few variables you can actually control.
Reinvest all dividends Don't withdraw gains. Let them compound. Most Swiss investment products do this automatically, but check to be sure.
Increase contributions with salary raises Got a 3% raise? Increase your investment by 2% and enjoy 1%. You won't miss money you never had.
Stay invested during crashes Market crashes feel terrible. They're also the worst time to sell and the best time to buy more. The 2008 crash, the 2020 COVID crash... investors who stayed in recovered and then some.
The Bottom Line
Compound interest isn't magic, but it's close. The formula is simple: start early, contribute regularly, keep fees low, and don't touch it.
This calculator shows you the math. What you do with it is up to you.
Pro tip: Save your calculation using the share button. It creates a URL with all your inputs so you can revisit it later or share your scenario with a financial advisor.
Now run your numbers. Then compare them with our Pillar 3a comparison to find the lowest-fee provider for your situation. Because the best compound interest calculator in the world is useless if you're paying 1% more in fees than necessary.