The 3a retirement category is widely used in Switzerland. Approximately two thirds of the working population have made use of it at some point. These tips from moneyland.ch will help familiarize you with the 3a category and the things you should understand before opening a 3a retirement account.
Tips for choosing the right 3a account:
1. Compare accounts
Take the time to compare accounts using the 3a retirement account comparison on moneyland.ch. Interest rates vary between banks and the difference in interest rates used by banks can add up to hundreds of francs per year.
2. Claim tax deductions
Using the 3a category to save for retirement has tax advantages in that you can deduct contributions from your taxable income. The maximum possible annual contribution to combined 3a savings solutions is set annually. Depending on your place of residence and the income tax bracket which you fall under, your tax savings can equal as much as 30 percent of your 3a contributions.
3. Maximum contribution without an occupational pension fund
If you are employed but do not participate in a category 2a occupational pension fund (as a self-employed person, for example), you can save up to 33,840 Swiss francs in 3a savings accounts or other 3a saving solutions during 2018.
4. Maximum contribution with an occupational pension fund
If you are employed and participate in a category 2a occupational pension fund, you can save up to 6,768 Swiss francs in 3a savings accounts and other 3a savings solutions during 2018.
Assets held in 3a retirement accounts are categorized as preferential deposits by the Esisuisse depositor protection scheme. As such, up to 100,000 Swiss francs per bank and customer (in combination with other assets) are classified as privileged assets. You can find more information on this topic in the moneyland.ch guide to bank failures.
6. Anticipatory tax on interest
If the interest you earn on your 3a savings exceeds 200 francs annually, an anticipatory tax equal to 35% of interest earned will be levied. The withheld yields are balanced with other taxes and deductions when you complete your tax return.
Closing 3a accounts incurs a fee at some banks. There are other incidental costs which may apply. You can find clear information in the moneyland.ch guide to possible costs associated with 3a accounts.
8. 3a savings account or retirement fund?
In addition to the 3a savings accounts offered by banks, there are also a number of 3a retirement funds through which you can invest tax-privileged 3a retirement assets. You can request a detailed breakdown of the costs and benefits of Swiss 3a retirement funds at the foot of the moneyland.ch guide to 3a retirement funds.