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Fixed-term deposit rates in Switzerland
Fixed-term deposit accounts are regaining popularity in Switzerland. While past periods of negative interest rates discouraged many savers, fixed-term deposits have become attractive again in 2025 for risk-averse investors.
Whether a fixed-term deposit account is suitable depends on several factors, including your investment horizon, risk tolerance, and return objectives.
In this article, we explain how fixed-term deposits work, provide an overview of current interest rates in Switzerland, and highlight why comparing offers is crucial to optimising your savings.
What is a fixed-term deposit?
A fixed-term deposit (also known as a time deposit or term deposit) is a savings product with a fixed duration. During this period, the depositor earns a guaranteed interest rate on their capital. This protects against interest rate cuts but also means missing out on potential rate increases. The specific terms vary between banks.
Advantages:
Predictability: The return is fixed for the entire duration.
Earnings visibility: Depositors know from the outset how much they will receive at maturity.
Low risk: Fixed-term deposits are considered safe, with deposit protection of up to CHF 100,000.
Disadvantages:
Limited flexibility: Early withdrawals are generally only possible with penalties.
Opportunity cost: If interest rates rise after opening the deposit, you cannot benefit from higher returns.
Opportunities and risks of fixed-term deposits
Fixed-term deposits are transparent and often regarded as low-risk investments. They can be a suitable option when interest rates are expected to fall, as they lock in the current rate. For instance, those who secured fixed-term deposits before the Swiss National Bank’s (SNB) negative interest rate phase were able to benefit from guaranteed returns throughout the term.
However, if interest rates rise after opening a fixed-term deposit, there is an opportunity cost. The initial rate remains unchanged, preventing investors from taking advantage of higher market returns. Additionally, in Switzerland, fixed-term deposit rates are generally on the lower side, reflecting their lower risk level. Furthermore, interest earnings are subject to income tax and a 35% withholding tax, which can be reclaimed if properly declared.
Another key risk is limited access to funds. If capital is needed before the deposit matures, withdrawal fees or reduced interest rates may apply. Therefore, fixed-term deposits are best suited for funds that are not needed in the short term.
From a liquidity management perspective, fixed-term deposits can be a strategic tool. Just as businesses allocate liquidity into different "pools," private investors can also segment their capital, keeping some funds readily accessible while locking in higher returns on the rest.
Current fixed-term deposit interest rates in Switzerland
After a period of historically low or even negative rates, fixed-term deposits have become more attractive again in 2025. Medium-term deposits (one to three years) often provide a good balance between flexibility and return potential.
At present, fixed-term deposit interest rates range from 0.3% to 1.7% per year, depending on the term, bank, and minimum deposit amount. Smaller banks and regional institutions sometimes offer better rates than major banks but often require higher minimum deposits.
Factors influencing fixed-term deposit rates:
Swiss National Bank (SNB) policy: The SNB’s interest rate decisions directly impact the broader market.
Market conditions: When banks need capital, they raise interest rates to attract deposits.
Timing: Locking in a fixed-term deposit during a low-rate environment secures a stable return but prevents benefiting from future rate increases.
Tips for choosing the best fixed-term deposit account
Selecting the right bank and term requires careful consideration. In addition to the advertised interest rate, other factors should be assessed:
Term and withdrawal conditions
Funds remain locked in until maturity. Ensure that you will not need access to this capital before the term ends.Interest rate vs. fees
Some banks offer attractive interest rates but charge account maintenance fees. A full comparison is necessary to determine actual profitability.Tax implications in Switzerland
Interest earnings are subject to income tax. The 35% withholding tax can be reclaimed if properly declared in your tax return.Diversification and liquidity planning
Staggering investments across different terms ensures some liquidity while securing better long-term rates.
Comparison of fixed-term deposit offers from Swiss banks
Fixed-term deposit interest rates vary widely depending on the bank, deposit term, and investment amount. Below is an overview of the interest rates available in the first quarter of 2025 for a 12-month CHF deposit:
Important: The data mentioned above may change at any time and are regularly updated by banks. To obtain fully reliable information, investors should always check the latest details directly on bank websites or independent comparison platforms.
Conclusion
Fixed-term deposits in Switzerland can be an attractive option for investors prioritising security, predictability, and stable returns. However, flexibility is limited, and once a term is locked in, there is no possibility of adjusting to rising interest rates. Returns are generally moderate, reflecting the low risk associated with these investments.
Disclaimer: This article is for informational purposes only and does not constitute financial advice. Whether a fixed-term deposit is suitable depends on individual factors such as risk tolerance, investment horizon, and return objectives. Seeking advice from an independent financial expert is recommended.
