Arbitrage tax vs composed interest


I have one question. If I have 1,5k per month to invest.

Is it better to put everything in VT ?

Or putting 1k in VT + 0,5k in viac 3 pillar?

A sort of arbitrage between free tax vs composed interest

Maybe this is obvious for you, but this is a serions question

Thank you for reading

You get the effect of compounding also when investing in pillar 3a. If you don’t need the money before 60 and your marginal tax rate is not extremely low, maxing out pillar 3a at VIAC or finpension is likely the best choice. See also Pillar 3a contribution when when switching to full time studying


How old are you? Can you reasonably assume to be able to withdraw 3a money in next 10-15 years, for example as a downpayment for a mortgage.

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I am 30 years old, yes i think so

Here we were trying to do some estimations


Thanks all of us for your input.

So for me 30 years old, 90k salary per year best solution would be to max my etf vt ? Am I right ?

You shouldn’t generalise that calculation. There’s a couple of points in that estimation that I would challenge (though maybe I should do so in the linked thread rather than here).

For instance, it assumes 0.5% brokerage cost on non-3a investment and an additional 1% (!) each year for fund management and custody in a 3a product - when finpension advertises 0.0% TER pension funds with additional tax privileges and a 0.39% annual fee.

I’m also not sure about baking in 1.5% annual inflation in the investment rate of return. Would your yearly savings amount then be constant over a 30-year period, and what about all the other fixed amounts (or progressive tax rates) in the calculation?

Probably yes. Check also this

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Yes, if you go with the mustachian assumption that you can make 5% return annually (after inflation and fees) on your investments.

Don’t forget that investing into pillar 3a gives you an upfront tax advantage, alone due to paying in.

A net income of only about CHF 74’000 in the canton of Valais for example is estimated by Comparis 3a tax calculator to save about CHF 1’800 of tax each year.

What are you going to do with these 1’800 CHF, or CHF 150 each month? :point_right: It could increase your monthly savings amount by 10% “for free”.

Well, it’s of course not entirely free if you have to pay taxes at the time of withdrawal, is it? But 3a investments are mostly tax-free (during the savings and accumulation period), as opposed to dividend distributions from your regular non-3a portfolio, which are taxed each year. In your case, you could even contribute more to 3a, since you haven’t exhausted that yet.

In other words: similar to interest, the tax savings you make by investing in pillar 3a will also “compound” over time.

PS: @Cortana made a similar point in the other thread linked above.

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