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Paying into pillar 3a is one decision. What happens to the money afterwards is the second one, and it costs more. A 3a cash account pays well under one percent. A securities solution invests the same money. Over twenty or thirty years a six-figure sum separates them. This calculator shows you how large that gap is in your case. The calculator shows you the what. The book shows you the how.
After withdrawal tax: CHF 412’445
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Purple is the 3a cash account, green the securities solution. X axis in years, Y axis in thousands of francs.
| Year | Paid in | 3a cash | Securities | Difference |
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How this is calculated
Both sides compound annually, and your contribution lands at the end of the year. That is how pillar 3a works in practice: one payment a year, before the December deadline. So your money earns nothing in year one.
Final capital = contribution × [((1 + i)n − 1) ÷ i]
i is the annual rate: the account rate for cash, the return less total costs for securities. n is the number of years. Costs are subtracted from the return because that is exactly how they bite: they do not reduce your balance, they reduce your growth.
The tax saving is contribution × marginal rate × years. It is deliberately not compounded, because that money lands in your private account rather than in your 3a. If you invest it every year, your result is better than shown here. The same deduction applies to a cash account, which is why the tax saving does not decide between the two.
The figure after withdrawal tax is a rough approximation. The rate is cantonal and progressive, depends on marital status, and can be cut substantially by staggering withdrawals across several accounts and several years.
My own calculation using the tool above. CHF 7’258 a year for 25 years, compounded annually, contribution at year end. Account rates and provider costs checked August 2026, sources at the foot of this page.
Pillar 3a interest rates: what a cash account actually pays
The short answer is: very little, and less than most people assume. The best nationally available 3a account rate is 0.65%. A handful of regional banks pay up to 1.00%, but only accept customers living in their own catchment area. Cantonal and regional banks pay noticeably more than the big banks.
That is where most comparisons stop. They rank 3a accounts by interest rate, which implies the choice between 0.45% and 0.65% is the decision that matters. It is not. The gap between the best and worst 3a cash account in Switzerland is smaller than the gap between the best 3a cash account and an entirely ordinary securities solution.
Why the gap gets so large
At 0.60%, money doubles in roughly 116 years. At 6.61%, which is 7% less 0.39% in costs, it doubles in a little over ten. That is ordinary compounding, except that in pillar 3a it bites harder: the money is locked up until five years before retirement anyway. You already have the long horizon, whether you use it or not.
The same compounding question hides in your second pillar, where nobody shows you a calculator at all: your pension fund certificate usually projects at the 1.25% legal minimum, while well-run funds credit far more. What that gap does to your future pension, and how to read your certificate, is in the Swiss pension fund conversion rate guide.
- Your time horizon is fixed for you. You cannot spend 3a money at short notice. The argument that equities are too volatile in the short run lands worse here than for any other pot of money you hold.
- Costs are the second lever. Swiss providers range from 0.12% to 0.90%. On CHF 100’000 that is CHF 780 a year, and you get nothing extra for it.
- You can use the full equity allocation. Several providers allow strategies at full equity. If you have thirty years, there is no reason to accept a defensive default just because it is the default.
- Doing nothing is a decision too. Paying in and leaving the money in cash is choosing 0.60%. It rarely happens deliberately. It happens because nobody asked.
What the tax deduction is really worth
The deduction is the most cited reason to pay into pillar 3a, and it is a good reason. On a CHF 7’258 contribution at a 25% marginal rate you save around CHF 1’800 a year in tax. Over 25 years that is roughly CHF 45’000.
But you get that deduction either way. It attaches to the contribution, not to what the bank does with the money afterwards. So the tax break is not an argument for a cash account and not an argument for securities. It is the argument for paying in at all. If someone sells you the deduction as a feature of a particular 3a product, they are selling you something every 3a product has.
Two things the calculator deliberately does not flatter. The tax saving is not compounded, because it lands in your private account and usually gets spent. If you invest it every year, your outcome is better than shown. And the marginal rate is not a fixed quantity: it depends on income, marital status, municipality and canton. 25% is a placeholder, not a promise. How it all fits together is in my Swiss tax guide.
The withdrawal tax no calculator shows
When you withdraw, your 3a capital is taxed separately from the rest of your income and at a reduced rate. Most 3a calculators quote a gross figure and stop there. The one above subtracts the tax, because that is the number that actually reaches you.
The rate is cantonal, progressive and depends on marital status. That is why it is a field you set rather than a constant I impose. The 5% default is an approximation for a mid-range canton, not a figure for your situation.
When a 3a cash account is still the right call
I think a securities solution is the better choice for most people, and the calculator above shows why. But there are cases where cash is the sensible answer, and it would be dishonest to leave them out.
If you are withdrawing within the next few years, whether for retirement, for property, or because you are leaving Switzerland, then the horizon that carries the whole calculation is gone. A drawdown shortly before withdrawal cannot be waited out. If you already know you would sell when markets fall, cash is also the more honest choice: a strategy you abandon is worse than a modest one you stick to. And if you do not yet have an emergency fund outside your 3a, build that first.
Set the calculator to a short horizon in those cases and watch the gap collapse. At 0% return the securities line actually drops below the cash line, because costs keep running. That is not a bug. That is the point.
How much you are allowed to pay in at all depends on whether you are covered by a pension fund. The two 2026 figures, the deadline and the new catch-up rules are in the pillar 3a maximum contribution guide.
Next: choose a provider
The calculator shows you the gap. These show you who closes it:
- Pillar 3a comparison: every provider ranked on all-in cost, each fee dated
- Pillar 3a maximum contribution: how much you may pay in for 2026
- All calculators and guides
Frequently asked questions
What interest does a pillar 3a account pay in 2026?
The best nationally available rate is 0.65%. A few regional banks pay up to 1.00% but only accept customers from their own region. Cantonal and regional banks pay more on average than the big banks. Over a long horizon, though, the spread between these rates is small next to the gap to a securities solution.
Pillar 3a cash account or securities, which is better?
Over a long horizon, securities in almost every case. On a CHF 7’258 contribution over 25 years the two are about CHF 239’000 apart, more than the total you pay in yourself. Cash is the better choice if you are withdrawing within a few years, or if you would sell during a market fall.
How much can I pay into pillar 3a in 2026?
CHF 7’258 if you belong to a pension fund. CHF 36’288 if you do not, capped at 20% of net earned income. Both figures are unchanged from 2025.
What does a 3a securities solution cost?
Between 0.12% and 0.90% a year depending on provider. What matters is total cost, not the management fee: some providers advertise a low fee and charge fund costs separately. On CHF 100’000 the cheapest and most expensive providers are about CHF 780 a year apart. Full figures in my Swiss pillar 3a comparison.
Do I still get the tax deduction with securities?
Yes, in full. The deduction attaches to the contribution, not to the investment form. It is therefore not an argument for one solution over the other, but the argument for contributing at all.
Can I hold 100% equities in pillar 3a?
With several providers, yes. If you have a long horizon there is no need to accept a more defensive default. Check which strategy your solution is actually set to, because the default is rarely the one with the highest equity allocation.
How much tax do I pay when I withdraw?
The capital is taxed separately from the rest of your income at a reduced rate. How much is set cantonally, is progressive, and depends on marital status. Because the tariff is progressive, staggering withdrawals across several accounts and several years cuts the bill noticeably.
Can I move from a 3a cash account to securities?
Yes. You can change 3a provider, and the balance transfers directly without counting as a withdrawal. Watch for exit fees at the outgoing provider, and make sure the current year’s contribution is allocated correctly.
Sources and assumptions. 2026 maximum deductions per the rules for tied pension provision. Account rates and provider costs checked August 2026; detail and the provider table are in my Swiss pillar 3a comparison. The 7% return assumption is the long-run average of broad equity markets before costs and is not a promise. The 5% withdrawal tax is an approximation and varies considerably by canton and marital status. Everything here is information, not investment advice. If you find a figure that is out of date, tell me and I will correct it.
The calculator shows you the what. The book shows you the how.
Pillar 3a is one building block. What comes before it, what comes after, and in what order, is in the book.
