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Old 30.09.2019, 22:06
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Rental deposit insurance or pay it myself

Having gone through an international move and settling into Geneva, confused as to whether I should go into overdraft and pay the rental deposit (some 10k chfs) myself or use one of Swisspost type rental deposit insurance schemes (5% of the rental value p.a.)

Any tips, advice would be v welcome!
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Old 30.09.2019, 22:55
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Re: Rental deposit insurance or pay it myself

If you can pay it yourself I'd say pay it yourself. After all it is 500,- a year down the drain.
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Old 30.09.2019, 22:57
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Re: Rental deposit insurance or pay it myself

In the long term it is very expensive to be cheap.
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Old 01.10.2019, 09:28
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Re: Rental deposit insurance or pay it myself

Thanks very much for the reply - I'm thinking in the short term, as i'm strapped for cash, might try the insurance option, and then revert to cash a couple of years down the line when (hopefully) the situation won't be so dire
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Old 01.10.2019, 09:57
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Re: Rental deposit insurance or pay it myself

There are different rental deposit companies. I think 4-5% pa is correct so your estimation is ok.

But consider it this way. You put 10k in the deposit, and after 10 or how ever many years your in that flat for, or in Switzerland, you'll take out 10k!! It will earn either nothing or as good as nothing.

So if you think you can earn 5% pa or more from that 10k, your better taking an insurance and having that 10k invested and working for you.

Even if you invest as a hobby and only take 2.5%, it'll be 40 years before you lost the deposit value.

For me, I am not convinced having a large sum of money sitting there doing nothing is a good idea, and I take the insurance option.
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Old 01.10.2019, 10:22
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Re: Rental deposit insurance or pay it myself

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So if you think you can earn 5% pa or more from that 10k, your better taking an insurance and having that 10k invested and working for you.
A risk-adjusted before-tax return will need to be in the double digits to make that worth doing. If you manage that consistently, maybe you should consider a position in wealth management.
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Thanks very much for the reply - I'm thinking in the short term, as i'm strapped for cash, might try the insurance option, and then revert to cash a couple of years down the line when (hopefully) the situation won't be so dire
It can make sense for a year or two. I you can't save the money by then you probably should move to a less expensive apartment. However, the regie/owner will have to return the original insurance certificate to the insurance company for you to get out of the contract, so you want to make sure beforehand they're Ok with you switching at a time of your chosing.
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Old 01.10.2019, 12:23
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Re: Rental deposit insurance or pay it myself

Sure - I think a year or two would be fine - just wanted to know if its a decent option for someone in this situation.

5% right now sounds much better than locking up 10k which I could put to better use at the moment.


Any idea if I need to get the landlord's permission for this or something? Or just apply for it myself and they don't need to know?

thanks much!
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Old 01.10.2019, 12:39
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Re: Rental deposit insurance or pay it myself

You just apply for it yourself.
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Old 01.10.2019, 13:17
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Re: Rental deposit insurance or pay it myself

Be aware that with, for example, swisscaution, you pay the insurance premium for them to guarantee that, if you incurr any large costs from damages you cause to the flat, they will pay for them right away, when the landlord demands them.

However, the actual damages are not covered by the "insurance", and you will have to refund swisscaution for any moneys they pay out on your behalf. What you're really buying is a guarantee, so that you're not suddenly in financial difficulties if a landlord makes a demand on you.

See also: https://www.englishforum.ch/housing-...sscaution.html
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Old 01.10.2019, 13:19
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Re: Rental deposit insurance or pay it myself

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Any idea if I need to get the landlord's permission for this or something? Or just apply for it myself and they don't need to know?
Your landlord will definitely need to know. The landlord will want one of two things from you:
  • either proof, on paper, that you have such a rental deposit insurance
  • or the cash to open the blocked rental deposit account.
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Old 01.10.2019, 13:37
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Re: Rental deposit insurance or pay it myself

You have to tell the landlord and get his agreement as a landlord is not obliged to accept a rental caution from an insurance company, some landlords have had bad experiences with this type of caution.


He can insist on a deposit account in a bank.


Insurance companies are in no way obliged to open a caution for anybody who applies for a guarantee, you can be refused.....
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Old 01.10.2019, 13:54
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Re: Rental deposit insurance or pay it myself

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I'm thinking in the short term, as i'm strapped for cash
But you intend to rent a flat which costs CHF 3300 per month (excluding any auxiliary cost)

Not paying your taxes only costs 2.6%, unfortunately as we are speaking about canton GE you will need either permit C or paycheck were 10k is a mere nuisance.
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Old 01.10.2019, 15:20
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Re: Rental deposit insurance or pay it myself

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But you intend to rent a flat which costs CHF 3300 per month (excluding any auxiliary cost)

Not paying your taxes only costs 2.6%, unfortunately as we are speaking about canton GE you will need either permit C or paycheck were 10k is a mere nuisance.
Can you elaborate on that? I've heard anecdotally from quite a number of people "I didn't pay my tax for years" .. "I used the tax money to save for deposit" .. "I owe 5 year of taxes" .. "I always pay two years later" etc etc

Me : I submitted my 2018 taxes, got some orange payment slips, paid them all in full by April/May 2019.. Happy days.. Then I received a letter in August with an "adjustment" for an extra 10k they wanted and I had 30 days to pay or they'd open a poursuite.

So the 2.6% ?
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Old 01.10.2019, 16:14
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Re: Rental deposit insurance or pay it myself

What with inflation and a negative/zero interest rate it doesn't really make much sense to save for a deposit when the tax people charge you 3% for late payment
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Old 01.10.2019, 17:06
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Re: Rental deposit insurance or pay it myself

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Your landlord will definitely need to know. The landlord will want one of two things from you:
  • either proof, on paper, that you have such a rental deposit insurance
  • or the cash to open the blocked rental deposit account.

Noted - thanks much!
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Old 01.10.2019, 17:10
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Re: Rental deposit insurance or pay it myself

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But you intend to rent a flat which costs CHF 3300 per month (excluding any auxiliary cost)

Not paying your taxes only costs 2.6%, unfortunately as we are speaking about canton GE you will need either permit C or paycheck were 10k is a mere nuisance.
You forget that a lot of jobs in GE are tax exempt too

Just need to prioritize - with two international relocation in the last 12 months and some other high cost life events, cash strapped for now - hopeful that in a few months, the 10k will be a "mere nuisance" as you say.
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Old 01.10.2019, 17:48
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Re: Rental deposit insurance or pay it myself

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Me : I submitted my 2018 taxes, got some orange payment slips, paid them all in full by April/May 2019.. Happy days.. Then I received a letter in August with an "adjustment" for an extra 10k they wanted and I had 30 days to pay or they'd open a poursuite.
It depends on the canton. In some cantons the current tax year's payment slips are a mere payment suggestion. Interest rates till you get the final bill are those listed under "Ausgleichszinsen"
https://www.comparis.ch/steuern/steu...zahlung-zinsen

Once the final bill arrives the Verzugszinsen will kick in. But as you mention, poursuite/Betreibung is something which could happen. Better arrange a payment plan.
 

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