Understanding fixed-term deposits in Switzerland: interest rates, terms, and providers

Are you looking for a relatively safe investment option for your savings? Fixed-term deposit accounts in Switzerland are a popular option for private investors. But what exactly does this investment product entail, and what conditions do Swiss banks currently offer? In this article, you will learn everything you need to know about fixed-term deposits: how they work, current interest rates, and what to consider when investing your money in a fixed-term deposit account.

What is a fixed-term deposit and how does it work?

A fixed-term deposit (also known as a time deposit or term deposit is a relatively safe investment with a fixed duration and a guaranteed interest rate. The principle is simple: you deposit a specific amount with your bank for a pre-agreed period and receive a guaranteed return.

The terms are flexible: in Switzerland, you can choose durations ranging from a few months to up to ten years, with one to five years being the most common. The key advantage: your interest rate remains constant throughout the term, regardless of fluctuations in financial markets. Depending on the agreement, your interest earnings will either be paid out at the end of the term (typically for shorter durations) or regularly (e.g. annually) for longer-term investments.

Availability and conditions for fixed-term deposits

In most cases, your invested capital is locked in until the end of the term. Early withdrawals are usually not possible or only allowed with interest deductions or fees. Therefore, fixed-term deposits should only be used for money you can afford to set aside for the entire duration of the investment.

Banks often require a minimum investment amount (e.g. 10’000 CHF or more), especially in Switzerland, where many fixed-term deposit offers are only available for higher sums. The specific conditions, such as minimum and maximum deposit amounts or interest payout frequency, vary from bank to bank.

The fixed interest rate protects you from declining rates during the term, but conversely, you may miss out on potential interest rate increases in the market (so-called opportunity costs) while your money remains locked in.

Fixed-term deposits vs. savings accounts

Unlike a savings or instant-access account, your money in a fixed-term deposit is not available daily but remains locked in until the end of the term. Additionally, banks cannot unilaterally change the interest rate for a fixed-term deposit – it remains guaranteed. While a savings or instant-access account offers more flexibility, its interest rate is variable and can change at any time, often influenced by market or central bank rates.

Currently, the average interest rates on Swiss savings accounts for adults are around 0.6% per year, while one-year fixed-term deposits typically offer slightly higher returns of about 0.7% per year.

Fixed-term deposits tend to offer a slightly higher return than traditional savings accounts, but at the cost of lower flexibility. Additionally, savings or instant-access accounts usually have no minimum deposit requirements and allow free deposits and withdrawals, which is not the case for fixed-term deposits.

Current fixed-term deposit interest rates in Switzerland

After the end of negative interest rates, the market has stabilised somewhat but remains moderate. Fixed-term deposit rates currently range between 0.3% and 1.2% per year, depending on the bank and term length. Key factors influencing rates include the duration, the size and type of the bank, and the minimum investment amount.

Smaller or regional banks often offer higher interest rates – sometimes above 1% – to attract investors, while large banks typically pay lower rates. As of early 2025, the best fixed-term deposit rates in Switzerland for 12-month terms are around 1.2% per year, whereas some major banks offer only around 0.3% to 0.6% per year. Below is a comparison table of selected providers and their approximate interest rates for a 12-month fixed-term deposit (as of early 2025).

Important note: This table provides sample conditions and is not exhaustive. Interest rates are subject to change, so you should check the latest offers from each bank (or comparison platforms) before making a decision. Fixed-term deposits in Switzerland are often arranged on a case-by-case basis, especially for larger sums, meaning that conditions may vary based on negotiations and customer profiles.

Advantages of a fixed-term deposit account

Why do many savers choose fixed-term deposits? Here are the key benefits at a glance:

• Relatively high security: Fixed-term deposits are considered a relatively safe investment. Deposits at Swiss banks are legally protected up to CHF 100’000 per customer and per bank (deposit insurance). This means that even in the unlikely event of a bank insolvency, your money is secured up to this limit. The Swiss financial sector is also subject to strict regulations, ensuring a high level of stability. Fixed-term deposits are therefore one of the most secure investment options in Switzerland for amounts up to CHF 100’000.

• Guaranteed returns: With fixed-term deposits, the interest rate is agreed in advance—so you know exactly how much you will earn. This predictability gives you financial security and makes it easier to forecast future returns. You do not have to worry about fluctuations in interest rates: even if market rates drop during your term, your agreed rate remains unchanged. This reliability is particularly valued in uncertain times.

• No market or price risks: Unlike shares or investment funds, the value of your fixed-term deposit does not fluctuate—you will receive your initial capital plus interest at the end of the term. As long as you stay within the deposit insurance limit, there is no risk of capital loss. Fixed-term deposits are therefore ideal for safely parking part of your wealth. Unlike bonds, they do not carry price risks due to interest rate fluctuations, as your money is locked in at fixed conditions until maturity.

• Higher interest rates than savings accounts: Fixed-term deposits usually offer better interest rates than savings accounts, although the difference is moderate. The advantage is often more noticeable for short terms of 1 to 2 years, as banks offer better conditions for tied-up funds.

Risks of fixed-term deposits

Although fixed-term deposits are considered a conservative investment, they are not entirely risk-free. The main risk is issuer risk: in the event of a bank’s insolvency, deposits may be at risk. The deposit protection scheme covers up to 100’000 CHF, reducing this risk but not fully covering higher amounts.

How to choose the best fixed-term deposit

Not all fixed-term deposits are the same—conditions can vary significantly between banks. To find the best option for your needs, consider the following:

Interest rate and effective return: Compare the rates for your chosen term. Smaller or online banks often offer higher rates. Check whether the top rate applies only to new customers or for deposits above a certain amount. Also, consider how interest is paid (annually or at maturity).

Bank reliability and deposit protection: The financial health of the bank should be a priority. In Switzerland, deposits up to CHF 100’000 are legally protected. For larger amounts, consider diversifying across multiple banks. Ensure that the bank is part of the deposit protection scheme (esisuisse).

Term length and flexibility: Think carefully about how long you can afford to lock your money away. Shorter terms (6 to 12 months) offer more flexibility, while longer terms (3 to 5 years) usually provide higher interest but less access to funds. Check whether early withdrawal is possible and under what conditions.

Other key factors:

• Minimum and maximum deposits: Many banks require a minimum deposit (e.g. CHF 10’000 or CHF 50’000).

• Fees: Fixed-term deposit accounts are usually free, but check for any hidden account maintenance or custody fees.

• Interest payments and reinvestment: Find out when and how interest is paid. For longer terms, annual interest payments may be beneficial as you can reinvest the returns.

• Ease of account management: In today’s digital world, online banking is crucial. Can you open and manage the account online? Do you need an additional reference account?

• Currency options: Most fixed-term deposits in Switzerland are in CHF, but some banks also offer deposits in foreign currencies (e.g. EUR or USD). These may offer higher rates but carry exchange rate risks.

Take the time to compare different offers. Don’t just focus on the maximum interest rate, but on the overall package that best suits your individual needs.

Conclusion: Fixed-term deposits – stability with certain limitations

Fixed-term deposit accounts in Switzerland offer a combination of relative security and predictable returns. However, like any investment, they involve risks—particularly issuer risk linked to the bank. You should also be aware of the limited flexibility: your money is locked in for the agreed term, and early withdrawals typically result in costs or interest losses. For investors looking to place part of their wealth relatively safely with a fixed return, fixed-term deposits remain an interesting option in the Swiss financial market.