Best 3a providers & brokers in Switzerland.

As an individual investor in Switzerland, you should:

? Max out your 3a pillar every year for tax savings and long-term investment growth.

? Invest beyond your 3a in a brokerage account to optimize returns.

But not all 3a providers or brokers are equal—fees, flexibility, and investment options can make a huge difference. Let’s go over the best choices to maximize your returns.

3a pillar

A few people asked me recently about which 3a pillar provider I use, or if they should invest in their 3a pillar in Switzerland at all.

Let’s answer the second question first.

Yes, in principle, anyone in Switzerland should max out their 3a pillar every year.

Why? Because it gives you three major advantages:

• Lower taxes today: Contributions to your 3a pillar are tax-deductible. This means you reduce your taxable income and pay less tax each year.
• Tax-efficient withdrawal later: When you retire, 3a withdrawals are taxed at a lower rate than income tax. The tax rate depends on your canton if you are still in Switzerland or the canton of the provider if you are leaving Switzerland.
• Investment growth: If you choose an investment-based 3a instead of a savings account, your money grows tax-free until withdrawal.?

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First thing first:? Bank vs. Insurance 3rd pillar.

There are two ways to open a 3a pillar account:

1. With a bank or pension foundation (best option)
2. With an insurance company (avoid this ??)

Why should you avoid 3a through an insurance company?

• Long-term lock-in: You commit to fixed yearly payments for decades. If your financial situation changes, you can’t stop contributing without penalties.
• Hidden fees: High commissions go to the sales agent who sold you the contract. (the ones who try to call you every week) These costs reduce your returns.
• No flexibility: You can’t easily change providers or adjust investments.
• Low returns: Insurance-based 3a contracts mix investments with a life insurance policy, leading to lower growth compared to a pure investment solution.

Instead, choose a 3a with a bank or pension foundation.

• No commitment: You contribute only when you want.
• Low fees: Transparent cost structures.
• Full investment flexibility: Choose between stocks, bonds, or a diversified portfolio.
• Easy provider switch: You can move your 3a assets to another provider at any time.

Best 3a Pillar Providers

Finpesnion, Viac or Frankly.

At the end of the day, never pay more than 0.5% total fees per year!

I personally chose Finpension (use my code 9AIZB1 if you sign up to get CHF 25) because:

• Lowest fees → 0.39% per annum
• Best flexibility → ?you can craft your own portfolio, for example 30% U.S equities, 30% MSCI World, 20% Bonds, 10% Real estate, 5% gold, 5% bitcoin. And change the strategy any week for no extra cost.
• No forced currency hedging → Unlike Frankly (ZKB), which limits foreign asset exposure, Finpension lets you invest globally without unnecessary hedging.

I made a table that compares Finpension, Viac, Frankly and UBS:

Fees make a big difference in the long run!

In the long run, a difference of 0.41% per year compounds into tens of thousands of francs in lost returns.

Let’s run a little simulation on Python, using the following assumptions:

• You max out your 3a contribution at CHF 7,258 per year (as you should)
• Your investments grow 7% per year (if god allows)
• You compare a 0.39% fee (Finpension) vs. a 0.80% fee from a more expensive provider such as UBS.

Here’s how much you’d have in your 3a after 10, 20, and 30 years:

That’s CHF 47,656 saved in fees, after 30 years.

Utilizing the 3rd Pillar for Home Ownership or Building a company

One of the big advantages of the 3a pillar is that you don’t have to wait until retirement to use it.

You can use your 3a savings to buy a primary residence in two ways:

1. Early Withdrawal – Withdraw your 3a savings to finance the purchase. Subject to tax (lower than income tax), depending on your provider’s canton (Schwyz has one of the lowest rates).
2. Pledging – Use your 3a as collateral for a mortgage, keeping your investments growing and reducing taxable income.

Which is better?

• Pledging is smarter if you can afford it since your 3a stays invested.
• Withdrawal makes sense if you need liquidity, but taxes apply.

Withdraw for self-employment, launching your own business

Also, if you plan to become self-employed, you can withdraw your 3a savings to finance your business. This withdrawal is taxed separately at a lower rate than income tax, based on your canton of residence at the time of withdrawal.

Brokers - Extra investment

If you want to invest beyond your 3a, and you should, you need an extra brokerage account.

I personally have an automatic monthly transfer planned on the day I receive my salary that sends: cash to my 3a pillar, my broker to be invested directly, and taxes ??.

Choosing the right broker is just as important as choosing the right 3a provider.

Which Broker should I choose?

Again I made a visual of the best brokers for Swiss investors:

• Interactive Brokers (IBKR) → Best overall for low fees and global access. (use my link: https://www.interactivebrokers.com/referral/baran677 --> it gives you up to $1,000 of free stocks)
• Degiro → Good alternative, slightly higher fees but easy to use.
• Swissquote and Yuh → Best if you insist on a 100% Swiss broker, but much more expensive. For small investors, Yuh is cheaper and simpler. For serious investors, Swissquote offers more flexibility and lower fees for large trades.

There is a great simulation on thepoorswiss website that shows you how much you save on fees every year through different brokers.

Let's say you have a CHF 100k account and you invest CHF 1k per month:

What happens if the provider goes bust? (rip Flowbank)

If you have trust issues like me, you might be wondering what are the actual risks associated to keeping your wealth parked in some of these providers.

This is called custodian risk.

Here’s what you need to know:

Cash Deposits (Risk Exists)

• In Switzerland, cash deposits are insured up to CHF 100,000 per bank, per client.
• In the European Union, cash is insured up to €100,000 per bank, per client.
• If you hold more than this in cash with a single provider, you are at risk in case of bankruptcy.

Securities (No Risk)

• Stocks, ETFs, and bonds held in custody are not part of the bank's balance sheet.
• Even if your broker goes bankrupt, your securities remain yours and will be transferred to another custodian.
• Most banks and brokers use third-party custodians to hold securities.

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Key takeaways:

• Best 3rd pillar: Finpension → Best combination of low fees, flexibility, and tax efficiency.
• Best broker: IBKR for lowest fees, but Swissquote if you prefer a local provider.
• General rule: Max out your 3a every year. Avoid insurance-based 3a. Use a broker with low fees to optimize long-term returns.
• Avoid holding too much cash at any one provider.
• Securities are safe, even in the case of a broker’s failure.
• If you use Finpension, Interactive Brokers, or any other custodian, the main risk is holding more than CHF 100,000 in cash.

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Disclaimer:

This article is for informational purposes only and does not constitute investment advice. Always do your own research or consult a professional before making financial decisions.