Term accounts and cash bonds experienced a real renaissance after the abolition of negative interest rates. These products are characterized by a fixed interest rate for a specific period (generally between one and ten years).
Recently, interest rates have fallen again, but on average they remain higher than the savings account average. Despite the fall in interest rates, cash bonds and term deposits continue to be in demand among investors: these products are in demand by people who do not want to invest their money in riskier investments such as stocks but who wish to obtain higher remuneration than that offered by a savings account.
Comparison of average interest rates
Currently, the unweighted average interest rates for term deposits and one-year cash bonds reach 0.73 percent, while they stand at 0.65 percent for two-year deposits, 0.72 percent for five-year deposits and 0.84 percent for ten-year deposits. For comparison, adult savings accounts earn an average interest rate of 0.59 percent.
“Current bonds and term accounts currently earn slightly more on average than savings accounts,” explains Benjamin Manz, director of moneyland.ch. “The differences in remuneration between the durations are not significant. The interest rates offered for one-year term deposits are even similar to those of ten-year term deposits. As an alternative to the savings account, it is therefore above all short-term investments, lasting one to two years, which are attractive,” he continues.
Term accounts and cash bonds are, just as is the case for savings accounts, guaranteed by deposits of up to 100,000 francs per establishment and per customer. Unlike savings accounts, the interest rate is fixed for the entire term, which can be an advantage or a disadvantage depending on the interest rate environment. People who expect interest rates to continue to fall in the coming years have an advantage by opting for a term account or cash bond. However, you should be aware that the money is blocked for the chosen duration, while the withdrawal conditions are more flexible for savings accounts.
The differences in interest rates are considerable
The differences in interest rates between banks are significant. According to moneyland.ch’s comparison of cash bonds and term deposits, the interest rates of different providers are between 0.25 and 0.9 percent for term deposits with a maturity of one year. , while they reach between 0.15 and 1.2 percent for those at two years, between 0.2 and 1.5 percent for those at five years and between 0.25 and 1.75 percent per year for those at ten years old. For comparison, interest rates for adult savings accounts range from 0 to 1.75 percent per year.
For cash bonds and term accounts, account maintenance or deposit fees may be charged depending on the bank concerned, which erodes the interest earned. The moneyland.ch comparison also takes these costs into account. Before opting for a fixed rate product, investors should therefore compare not only the interest but also any fees.
Table 1: Cash bonds and term accounts with the highest interest rate for one year
| Provider | Interest rate |
|---|---|
*BSU: the interest rate increases with the investment amount, reaching 0.9 percent from CHF 1 million
Table 2: Cash bonds with the highest interest rate for two years
| Supplier | Interest rate |
|---|---|
Table 3: Cash bonds with the highest interest rate over five years
| Provider | Interest rate |
|---|---|
In the comparison of cash bonds and term accounts on moneyland.ch, the interest rates of more than 50 banks were noted for a term investment. The table above lists the offers (in Swiss francs) with the highest interest rates, excluding fees. Situation as of 16.10.2024. Interest rates for new subscriptions may change at any time.
Additional information:
Comparison of term deposits and cash bonds
