Savings vs. Stock Market
December 3, 2024
3 min read
arvy's Teaser: You have CHF 50,000 or CHF 100,000 sitting in your 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 numbers 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. Nice, round number. Feels good. Feels safe.
But the number is lying.
In Switzerland, you currently earn 0.5–1% interest on savings. Meanwhile, inflation runs at around 1.5–2%. That means: every year, your money loses purchasing power. Not because someone takes it — but because everything around you gets more expensive.
What inflation really means
At 1.5% inflation, CHF 100,000 loses roughly 36% of its purchasing power over 30 years — you effectively have CHF 64,000. At 2% inflation, just CHF 55,000.
The number on your account stays CHF 100,000. But you can only buy half as much with it. The savings account isn't a safe harbour. It's 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, real) vs. CHF 498,000 (invested, real). That's not double — that's 6× as much. And the CHF 398,000 in gains is completely tax-free in Switzerland (capital gains).
"But What If the Market Crashes?"
Fear of a crash is the most common reason for not investing. And it's understandable. But it ignores the facts:
Every crash in history has recovered
1987 (Black Monday): –22% in one 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 no single 20-year period in history has the global stock market lost money. Not a single one.
Yes, crashes happen. No, they're not a reason not to invest. They're a reason to have a long time horizon and not sell.
And If You Add a Monthly 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 the whole thing tax-free.
In a savings account, the same CHF 280,000 after 30 years: CHF 290,000. CHF 10,000 in interest. After inflation: a purchasing power loss.
The Swiss Advantage
In almost no country in the world does investing pay off as much as in Switzerland:
Capital gains: Tax-free. The CHF 1,091,000 in gains from the example above? CHF 0 in taxes. In Germany, that would be ~CHF 273,000 in withholding tax.
Strong franc. You invest from a position of strength. The CHF has consistently gained value against the EUR and USD over 50 years.
Low inflation. Switzerland historically has one of the lowest inflation rates worldwide. Your real return is higher than in almost any other country.
Pillar 3a. Invest CHF 7,258 per year tax-deductibly. Double benefit: tax savings today + returns tomorrow.
The Bottom Line: Cash Isn't 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 uncertain. But over 10, 20, 30 years it has rewarded every single long-term investor. Without exception.
The question isn't: Can I afford to invest?
The question is: Can I afford not to?
"The greatest risk in life is taking no risk at all. In a world that's changing fast, the only strategy guaranteed to fail is taking no 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 timeframe.
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 informational purposes only and does not constitute personal financial or investment advice. Historical returns are not a guarantee of future results. arvy is a FINMA-supervised asset manager.
