Advantages of the 3a securities app from finpension
1. Lower fees without foreign currency exchange fees
Our 3a securities app is very affordable. The costs range from 0.39 to 0.42 %* per year. That’s up to 75% less than traditional retirement funds.
* 0.39 % management fee and 0.00 to 0.03 % product costs (TER).
We also waive the fees on foreign currency exchanges. Here an explanation: The funds we use can be subscribed in different currencies:
Unlike our competitors, we deliberately invest in the CHF-tranches. If necessary, the exchange into the other currency, for example into the USD, takes place within the fund at the average exchange rate and without a premium.
This is relevant because the competition sometimes invest in the foreign currency tranches on purpose to earn some money on a little-noticed sideline (foreign currency exchange).
2. Better performance thanks to exemption from foreign taxes on dividends and interests
We use funds that are only accessible to pension funds. Because the circle of investors is very restricted, the funds can be exempted from tax on foreign income.
This is because of the preferential treatment in the international double taxation agreements, as illustrated here with the example of the USA:
It is not a matter of course that pension funds are optimised regarding the withholding tax. We made a quality check of several pension funds and found that none of the pension fund providers examined makes this effort.
3. Higher interest rates on bond and money market funds than on a 3a account
Another reason to go with the 3a securities app from finpension is the yield to maturity on bond investments. They are now significantly higher than the interest rate you get on a cash 3a account:
Share in %
Yield to maturity p.a.
CSIF (CH) Bond Corporate Global ex CHF Blue ZBH
CSIF (CH) Bond Switzerland AAA-BBB Blue ZB
CSIF (CH) I Bond Government Global ex CHF Blue ZBH
CSIF (CH) Bond Government Emerging Markets USD Blue DBH
Total weighted yield to maturity
Weighted yield to maturity of bond investments (before currency hedging costs) (Factsheets as of 31 August 2022)
The return on the money market fund is now also back in positive territory. As of the end of August 2022, the yield to maturity is 0.40 %, as you can see from the factsheet of the CSIMF Money Market CHF ZB. The money market fund can be used as a cash alternative at finpension.
4. More effective thanks to advance payments of the VST reclaim from the federal government
Finally, our 3a securities app is more effective because we advance you the withholding tax. This means that the withholding tax can be reinvested more quickly, resulting in a higher interest rate.
Here a brief explanation: the funds used must pay the withholding tax to the federal government every year. We can only reclaim this withholding tax from the federal government in spring. But we do not wait for that. We credit the withholding tax to you immediately after we receive the statement from the custodian bank.
Example of the procedure:
May 2022: Delivery of withholding tax to the government (by custodian bank).
May 2022: Crediting of the withholding tax to the client portfolios (by the foundation)
January 2023: Reclaim of withholding tax from the government (by foundation)
March 2023: Payment of the withholding tax to the Foundation (by the government)
The «advance payment» of this VST reclaim has two advantages for our clients:
The withholding tax is already reinvested on the next trading day.
Our clients do not miss out on the withholding tax, even if they leave us between the settlement by the custodian bank and the repayment by the Federal Tax Administration.
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