The most important factor in choosing vested benefits accounts is the interest you earn, and this varies notably from bank to bank. But taking a closer look at possible fees and charges is also worth your while.
Vested benefits accounts are not always free of charge
Vested benefits accounts generally do not have annual account fees. However, some Swiss vested benefits foundations levy fees and charges when you terminate vested benefits accounts or life insurance policies.
Even the maintenance of vested benefits accounts is not free of charge at all vested benefits foundations.
Penalty charges for early termination
Terminating your vested benefits account ahead of reaching retirement age will cost you at many financial services providers. Penalty charges or other fees may apply when: you transfer your vested benefits to another bank; you die; you begin receiving a disability pension; you withdraw vested benefits after becoming self-employed; you withdraw vested benefits to buy a home; you withdraw vested benefits to amortize a mortgage; you withdraw vested benefits upon leaving Switzerland.
Major differences in fees charged
Costs vary between Swiss banks and other vested benefits foundations. You can compare the exact costs and interest using the interactive vested benefits comparison on moneyland.ch.
Some banks only charge fees when you transfer money to another vested benefits foundation. Others only charge fees if you do not continue to make use of any of their services after transferring your vested benefits to another bank.
Certain banks and insurance providers only charge a fee for account closures when you close your vested benefits account less than one year after opening it. The Revor foundation, for example, charges a 25 Swiss franc fee in this case.
Additional fees for home-purchase withdrawals
Fees for extraordinary vested benefits withdrawals such as withdrawals for home purchases are the most common. Swiss banks use the term “Wohneigentumsförderung” or “WEF” to refer to this type of vested benefits withdrawal (French: Encouragement à la propriété du logement).
Many banks and insurance companies charge fees of between 200 and 400 Swiss francs when vested benefits are used to finance home purchases or mortgages in Switzerland. Some charge additional fees related to notarization. Other fees may also apply when you finance a property outside of Switzerland using vested benefits.
Vested benefits accounts managed by the Rendita vested benefits foundation have no fees and charges aside from the 400-franc administrative fee for home purchase withdrawals. The Revor foundation also charges 400 francs for this service (including notary entries).
Some banks waive the fee for home-purchase withdrawals when you use the money to finance a mortgage from the same bank.
Even standard account termination is not always free of charge
Even cashing out your account normally – in order to transfer assets to a new pension fund, for example – incurs fees and charges at some service providers. Depending on the bank or insurance company you use, you may pay fees of 20, 25, 30, 50 or even 100 Swiss francs.
Other possible costs include fees for statements and charges for researching your address if you fail to report an address change.
Free vested benefits accounts?
Unfortunately, there are currently no vested benefits accounts which do not charge any fees in all situations. However, certain fees only apply to exceptional withdrawals. If you stick to standard withdrawals, you can still use many vested benefits accounts free of charge.