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From zero interest to plus: Effects of the interest rate hike for Swiss long-term savers

Not so long ago, notable interest rates on savings accounts were an absolute pipe dream. However, the tide has turned and more and more banks are offering attractive interest rates for savers.

Whether or not you take advantage of interest on credit balances has a significant impact on your wealth accumulation. And in times of high inflation, interest rates have a particular impact on your wealth preservation.

In this post you will learn how to attractive interest accountssuch as Zak of Bank Cler, cleverly use for you can.

Table of contents

The interest rate hike and its effects

Historically, there is often a link between rising interest rates and increased inflation. But we're not just talking about a positive reward for your savings when you look for an attractive interest account.

Rather, it is also a matter of Putting the brakes on asset depletionwhich affects your money through inflation.

For every one percent of inflation, it takes one percent of interest/return to maintain the value of your assets.

A attractive interest rate compared to other savings accounts is therefore inevitableif you want to maintain and increase the value of your money in the long term.

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5 tips for making the most of the interest rate increase

The highest return on your money comes from investments. However, as you know, return and risk are always related, which is why you should only invest money that is not needed in the long term.

To make the most of interest rate increases, you should follow these 5 interest rate tips:

  1. Hold like this little cash/cash as possible, because there is no interest there.
  2. Find yourself a attractive interest accountsuch as Zak from Bank Cler, where there is 1% interest.
  3. Park your short-term cash, your reserves and your nest egg in a Interest account available at any time.
  4. Hold your Savings deposits per bank to CHF 100'000 limited (deposit guarantee).
  5. Use an account modelto keep track, and apply this conveniently at a bank with Zak's savings pots, for example.

 

Savings account vs. cash

You like to have cash? I understand that. But do you also know the Hidden costs of your cash?

Similar to an account at a bank without attractive interest rates cash does not yield interest. But this does not mean that your money simply gets its value, because the Inflation eats at it every day.

An example?

Let's say you have a nest egg of CHF 10,000 in a savings account with an annual interest rate of 1 %.

After one year, your balance will be CHF 10,100 due to the interest (CHF 10,000 + 1 % interest). Your nest egg has therefore grown.

In the second year, the interest is calculated on the basis of the higher balance of CHF 10,100. The new balance in your emergency savings account after the second year is CHF 10,201 (CHF 10,100 + 1 % interest on CHF 10,100).

Do you know what After 10 years happened?

Your savings account will already show a total of CHF 11,046.

In comparison, without interest (or as cash): No increase in value!

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Conclusion

To your Safeguarding money against the loss in value of inflation and be able to benefit from attractive interest rates, you should Use interest on credit balances intelligently for yourself.

Holding cash in large amounts or parking money in accounts where interest rates are low or non-existent is not ideal. Zak of Bank Cler for example offers you a attractive interest of your money from currently 1.3 %.

Savings pots on the basis of a Account model give you an additional overview and order to your savings.

Use rising interest rates to your advantage and park your nest egg and other reserves on accounts where it is worthwhile. In this way you can specifically counteract the loss of purchasing power. Just bear in mind the limit of the deposit guarantee, above which you should spread your money over several banks at the latest.

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Transparency note: This article was created in collaboration with Zak from Bank Cler. The content and presentation have nevertheless been freely and independently created by Schwiizerfranke.

The information on Zak is intended exclusively for persons domiciled in Switzerland. A Zak account can only be opened with domicile in Switzerland.

3 responses

    1. Hello Kasper,
      As clearly stated below, this article was written in cooperation with Zak, where there is currently 1% interest and more in a few days.
      Here you will find the Interest rate overview at other digital banks in the test.

      Do you know any others? Please share them! (we are only talking about interest accounts, not fixed deposits).

      Reply
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