A comparison of term deposits and savings accounts – increase your money with a higher interest rate

Term deposits – a fixed interest rate for a fixed term

Term deposits offer a fixed rate of interest for a set term, generally between one and twelve months. The minimum amount is CHF 50,000 and your money is committed for the length of the term. Here are three important advantages to bear in mind:

1. Guaranteed return: One of the main advantages of investing in fixed deposits is that a fixed interest rate is guaranteed over the entire term. This stability gives you certainty, especially if you want a low-risk investment.
2. Higher interest rates: Term deposits normally offer higher interest rates than standard savings accounts. This means your money grows faster and you can achieve your financial objectives quicker.
3. Disciplined saving: The period of commitment for a term deposit encourages disciplined saving habits, because you do not have any access to your money until the maturity date. This prevents impulsive spending and helps you keep your long-term objectives in mind.

Savings accounts – a secure and flexible way to invest your money

Savings accounts are ideal for private individuals who prefer a traditional savings account with an attractive interest rate. Designed to provide a secure place to deposit savings, they are suitable for clients who are very safety-conscious with their money. Other benefits include:

1. Easy access to your money: Unlike with term deposits, traditional savings accounts allow you to access your money. This liquidity can be helpful in emergencies or when you need to pay for something unexpectedly.
2. Flexibility: You are the one who determines how much to pay into your savings account and when, and you can make withdrawals at any time up to the amount of your balance, subject to the notice period.
3. No fixed maturity: Unlike term deposits, savings accounts do not have a fixed maturity date. You can continue to use them indefinitely, so your savings grow steadily; at the same time, you retain the flexibility to adapt your financial strategy as required.

An individual choice

The choice between a term deposit or a savings account largely depends on your individual financial objectives and investment horizon. Your decision should take the following factors into account:

1. Objectives and timing: If you have particular long-term financial objectives like buying a house or paying for your child’s education, term deposits can offer a higher rate of interest and help you achieve these goals more quickly. On the other hand, if you need flexibility and access to funds for short-term goals or emergencies, a traditional savings account may be the better choice.
2. Risk tolerance: Savings accounts and term deposits are generally regarded as low-risk investments because of their stable interest rates, guaranteed returns and deposit insurance. If stability is important to you and you don’t want to be troubled by fluctuating markets, both options are a good choice. If you’re more willing to take risks, investment solutions with equities or bonds may make an attractive addition to your account. 
3. Diversification: It’s worth considering a combination of term deposits and savings accounts as a way of diversifying your savings strategy. This lets you benefit from the advantages of each option while also striking a balance between your financial needs and objectives.

It doesn’t matter whether you opt for a term deposit because of the stability and higher interest rates or a traditional savings account because of the flexibility and accessibility; what counts is that you’re aware of the features and benefits of both. We recommend you evaluate your financial objectives, risk tolerance and investment horizon to determine the best strategy for your individual circumstances. Consulting a relationship manager is always advisable. The team of experts at Bank CIC can provide advice tailored to your needs. We can achieve your financial goals together.

The interest rates Bank CIC offers are very competitive. Contact us today to find out more.