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Old 06.09.2011, 01:37
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Minimum term for Pillar 3A

I was thinking of putting money aside in a 3A account to pay off my mortgage.

With postfinance, I can get a 2% rate of return, and tax deduction, and the minimum term is 5 years.

Is this 5 year term normal or are there shorter ones around? I guess I'm OK with a 5 year term, but I would prefer the flexibility of being able to withdraw the amounts and use them to pay off part of my mortgage at an earlier point if required.
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Old 06.09.2011, 01:45
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Re: Minimum term for Pillar 3A

not sure about the minimum term but credit suisse are offering 2.25% return at the moment. I just opened one up with them.
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Old 06.09.2011, 07:21
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Re: Minimum term for Pillar 3A

Minimum term sounds suspiciously like an insurance based product rather than pure savings. AFAIK there is no minimum term for the 3A as such, but any insurance based product is likely to have minimum terms or exit penalties - i would not expect this of a savings product.
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Old 06.09.2011, 07:32
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Re: Minimum term for Pillar 3A

I'd question whether paying off a mortgage in Switzerland is worthwhile with interest only payments and current low rates. You would no longer be able to offset interest against Eigenmietwert on your tax declaration and current mortgage interest rates are below 2% for 5 years...
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Old 06.09.2011, 07:35
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Re: Minimum term for Pillar 3A

This is a useful quick comparator

http://www.vermoegenszentrum.ch/Priv...e-3a/Zinskonto

There is also a page for the fund based products which have this year mostly shown negative growth (no surprise there, but many people might not consider 3A to be a risky investment).

http://www.vermoegenszentrum.ch/Priv...schriftendepot

I previously posted some 'interpretation' of 3A, B http://www.englishforum.ch/insurance/109189-best-option-expat-between-3-pillar-b.html with a link to the postfinance site. At the time I observed that their 3A (ie fixed interest) had an option to link with an insurance policy - maybe that is what you looked at.
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Old 09.09.2011, 16:04
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Re: Minimum term for Pillar 3A

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I'd question whether paying off a mortgage in Switzerland is worthwhile with interest only payments and current low rates. You would no longer be able to offset interest against Eigenmietwert on your tax declaration and current mortgage interest rates are below 2% for 5 years...
depends if interest rates will stay low forever into the future. if not, then at some point it might be worthwhile to pay off the mortgage.
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Old 09.09.2011, 16:34
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Re: Minimum term for Pillar 3A

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I'd question whether paying off a mortgage in Switzerland is worthwhile with interest only payments and current low rates. You would no longer be able to offset interest against Eigenmietwert on your tax declaration and current mortgage interest rates are below 2% for 5 years...
The risk is if there are higher interest rates in the future, you might not be able to stay in your house in retirement. If you have to pay for ever & ever, it's not that different to renting. As tax rates are quite low in CH spending 100% of your Eigenmietwert to save 15-20% tax does not seem that attractive at least to me.
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Old 09.09.2011, 16:45
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Re: Minimum term for Pillar 3A

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The risk is if there are higher interest rates in the future, you might not be able to stay in your house in retirement. If you have to pay for ever & ever, it's not that different to renting. As tax rates are quite low in CH spending 100% of your Eigenmietwert to save 15-20% tax does not seem that attractive at least to me.
agree. if rent is 2000. and eMw is 70% = 1400. and tax on this is at 25%, then it is still only 350 chfs a month.
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