Pillar 3a: Save securities & invest flexibly

Do you wish to make provisions for your old age but are you not yet paying into pillar 3a? Or perhaps you already have a 3a account with a bank but it pays very little interest? Either way, it is worth considering the investment products of Zurich Invest Ltd as an interesting alternative. Zurich Invest Ltd offers a securities solution within pillar 3a – so-called "securities-based saving."

The saving process within pillar 3a restricted pension plans offers you tax benefits and optimal flexibility, as you decide when and how much you wish to pay in. Whether you are safety- or risk-oriented, Zurich Invest Ltd offers the right strategy for all types of investors within the context of securities-based saving. You decide whether you wish to invest your money in pure money market or bond funds, pure equity funds or mixed portfolios, based on your risk appetite and investment period.

Your benefit with securities-based saving: Your money doesn't simply sit in an interest-based pension account but develops in line with the capital markets through your securities. At Zurich Invest Ltd, your third pillar consists of collective investments (i.e., funds) which invest more in equities or bonds, for instance, depending on your investment strategy. Real estate can also be included. Investments are made broadly. This means that the risk is spread if certain investments fail to develop as was hoped.

Compared with a bank account, securities yield greater returns in the long term. At present, bank accounts are paying so little interest that it is scarcely possible to compensate for inflation. What's more, there are usually fees to pay, which also nibble away at your meager interest. In short: Your money sits around in your account but doesn't work for you. Nobody knows when the situation will change with respect to interest rates. It has already gone on for around 10 years though.

Are you worried about a stock market crash? Does fund-based saving seem too uncertain? If you only wish to invest money for a short time, it may well happen that your investment loses value painfully in a crash. But for younger people in particular, pillar 3a has a very long investment term, as you are saving money for your pension – which may still be decades away. Usually a crisis will be followed by an upturn, and a positive trend arises in the long term, as studies have proven.

A study by Swiss private bank Pictet analyzed stock market development over the past 95 years. This period included two world wars, the global economic crisis of the 1930s, the oil crisis of the 1970s, the recession of the 1990s and the financial crisis of 2008. Nevertheless – apart from in the major stock market crash in 1929 – investors have always made a profit if they retained their share packages for at least 13 years. The average increase in value per year was just under 8 %, according to the calculations of Nadia Gharbi and Jacques Henry from the Asset & Macro Research Team at Pictet Wealth Management. Even if you only reckon on a moderate return of 4 % after costs, your money that you invested will have more than doubled after 35 years – thanks to the compound interest effect.