Savings vs. Stock Market
December 3, 2024
4 min read
arvy's Teaser: You have CHF 50,000 or CHF 100,000 sitting in a savings account. It feels safe. But is it really? We run the numbers: what happens to your money over 10, 20 and 30 years — in a savings account vs. invested. The figures are unambiguous. And they're the reason we founded arvy.
The Savings Account: The Illusion of Safety
You log into your e-banking and see: CHF 100,000. A nice round number. Feels good. Feels safe.
But that number is lying to you.
In Switzerland you currently earn 0.5–1% interest on a savings account. At the same time, inflation runs at roughly 1.5–2%. That means: every year your money loses purchasing power. Not because someone is taking it from you — but because everything around you is getting more expensive.
What inflation really means
At 1.5% inflation, CHF 100,000 loses around 36% of its purchasing power over 30 years — in real terms you're left with just CHF 64,000. At 2% inflation: only CHF 55,000.
The number on the account stays at CHF 100,000. But you can afford only half as much with it. The savings account is not a safe harbour. It is a slowly sinking ship.
The Honest Calculation: Savings Account vs. Invested
Take CHF 100,000 and two scenarios: savings account (0.75% interest, 1.5% inflation) vs. invested (7% return, 1.5% inflation).
After 30 years: CHF 80,000 (savings account, real) vs. CHF 498,000 (invested, real). That's not twice as much — it's more than 6× as much. And the CHF 398,000 gain is completely tax-free in Switzerland (capital gains).
"But what if the market crashes?"
Fear of a crash is the most common reason people don't invest. It's understandable. But it ignores the facts:
Every crash in history has recovered
1987 (Black Monday): –22% in a single day → new all-time high within 2 years
2000 (Dotcom): –49% → full recovery in 7 years
2008 (Financial crisis): –57% → full recovery in 5.5 years
2020 (COVID): –34% → full recovery in 5 months
In not a single 20-year period in history has the global equity market lost money. Not one.
Yes, crashes happen. No, they are not a reason to avoid investing. They are a reason to have a long time horizon and not sell.
What if you also have a savings plan?
The calculation above shows a lump sum. But most people invest monthly. And then it gets even more impressive:
CHF 280,000 contributed yourself. CHF 1,091,000 gifted — by compounding. And all of it tax-free.
The same CHF 280,000 total in a savings account (0.75%) would be worth ~CHF 327,000 nominal after 30 years — CHF 47,000 in interest before inflation. In real terms, after inflation: less than the CHF 280,000 you put in. You pay every year for the privilege of keeping your money in the account.
The hidden cost: What 5 years of waiting costs you
Many people say: "I'll wait a bit longer — until the market is cheaper." Here's what those 5 years actually cost:
5 years of waiting costs CHF 419,000
You contribute CHF 30,000 less — but lose CHF 419,000 in final wealth. That's 14× more lost returns than saved contributions. Waiting is never the safe option. It's the most expensive one.
The Swiss Advantage
In few countries does investing pay off as much as in Switzerland:
Capital gains: Tax-free. The CHF 1,091,000 gain in the example above? CHF 0 in taxes. In Germany, that would be ~CHF 273,000 in capital gains tax.
Stable franc. You invest from a position of strength. The CHF has consistently gained against the EUR and USD over 50 years.
Low inflation. Switzerland has historically one of the world's lowest inflation rates. Your real return is higher than in almost any other country.
Pillar 3a. Invest CHF 7,258 per year tax-deductibly. Double effect: tax savings today + returns tomorrow. (→ Open Pillar 3a)
Conclusion: Cash is Not King — Cash is a Wealth Killer
The savings account feels safe. But over 10, 20, 30 years it's the opposite: it guarantees you lose purchasing power. Every month. Every day.
Investing feels risky. But over 10, 20, 30 years it has rewarded every single long-term investor. Without exception.
The question is not: Can I afford to invest?
The question is: Can I afford not to?
"The biggest risk in life is taking no risk at all. In a world that's changing quickly, the only strategy guaranteed to fail is not taking any risks."
Run the numbers yourself.
Our investment calculator shows you what your money does over 10, 20 or 30 years — with your amount, your savings plan, your timeline.
Investment Calculator | Start savings plan
This article was written by Thierry Borgeat, Co-Founder of arvy, and reviewed by Patrick Rissi, CFA, and Florian Jauch, CFA.
Disclaimer: This article is for general information purposes only and does not constitute personal financial or investment advice. Historical returns are not a guarantee of future results. arvy is an asset manager supervised by FINMA.
Disclaimer: This article is for general information purposes only and does not constitute personal financial or investment advice. Historical returns are not a guarantee of future results. arvy is an asset manager supervised by FINMA.
