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Financial reality: A comparison of interest rates, inflation, and investment returns.

In recent years, the financial landscape in Switzerland has changed significantly. Traditional savings methods that once offered reliable value increases now rarely preserve real wealth. Interest rates on savings accounts have been declining for decades, while inflation persists.

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In 1992, the average interest rate on savings accounts was around 7% per year. By 2024, the yield on long-term Swiss government bonds averaged just 0.5%, with interest rates on savings accounts typically even lower. As a result, saved cash loses real value, as inflation continuously erodes purchasing power.

The consequence: Anyone who deposits their capital in a savings account over the long term risks a real loss of wealth.

How to proceed

To safeguard the value of one's wealth and achieve a positive return, it's important to transition to investments that provide a positive return. Some basic rules apply when doing so:

1

Selecting the right asset class

  • Bonds: Fixed-income securities that are stable, but may provide a negative real return when inflation is high.

  • Equities: In the long run, equities offer the greatest potential real value increase, as companies adjust their prices and profits can rise.

  • Real estate: Real estate provides inflation protection, as rents and real estate values usually go up.

2

Taking into account the impact of inflation

  • Over time, cash loses purchasing power if the inflation rate is higher than the interest rate.

  • Whoever would like to preserve their wealth in the long run should invest in inflation-protected or return-generating types of investment.

3

Diversification as the key to success

  • A broadly diversified portfolio reduces risks and balances out market fluctuations.

  • Combine various asset classes to minimize risk and maximize return opportunities.

Example of an optimized strategy:

Security buffer

3–6 months' expenses on an account with a relatively decent interest rate.

Core investment

Invest CHF 500 a month in a broadly diversified solution with a long-term growth strategy.

Satellites

Addition of alternative investments such as gold, commodities or real estate funds.

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smzh for you

Our experts help you develop a sustainable investment strategy that is tailored to your individual needs. We offer:

  • Analysis of your financial status: What is your situation at the moment?
  • Development of an investment strategy: Which asset classes are suitable given your risk profile?
  • Long-term support: Regular adjustments of your strategy to changes in market conditions.

Thanks to our experience and independence, we are your reliable partner for long-term wealth creation.

We handle questions such as those shown on the right on a daily basis. You don't need to deal with them by yourself – our 360° Check-Up is free of charge and non-binding.

The purchasing power of your savings is reduced if inflation is higher than the interest rate on your savings account.

Assets such as equities, real estate, and commodities offer long-term inflation protection, as their prices tend to rise with inflation.

Bonds provide stability, but when inflation rises, their real return can be negative.

We analyze your individual situation and develop a tailor-made strategy to invest your capital in an inflation-protected way.