Preparing to buy real estate

Hi everyone,

I have a large sum of money to invest (after selling my house in France, It’ll be just about the required 20% down here :thinking:) and I’m looking for the best solution, knowing that this money will have to remain more or less available in the event of a property purchase.
CHF accounts don’t pay much interest, I’m with Yuh and their offer is 1% before withholding tax.
I had thought of converting this sum into EUR and depositing it with trading 212, for example, where the interest rate is quite attractive: 4.2% for EUR versus 1.5% for CHF.
When the time comes, I don’t think the euro will have collapsed by the time I need to switch back to CHF.

What do you think? Any other ideas?

Thanks in advance.

If you need the money any time within the next 5 years, I wouldn’t invest it, I would park it in the safest way possible in CHF. Like bank account(s), or short-term government bonds.

Even there, if the interest on EUR is 3% higher, I’d expect the EUR to be worth 3% less in CHF in a year, possibly more. And if some fintech offers a premium interest, I’d expect a risk to it.

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Perhaps a money market fund would be a good option to park the money. They generally have very short term duration so less susceptible to interest rate changes.

If you cannot have any risk whatsoever, then most likely the only option is fixed deposit or medium term notes.

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Not over 100k CHF, I hope.

It doesn’t work like this. Currency exchange rates can go up and down by +/-5% within a week. If you might need your cash as CHF any time, you don’t have many options: only liquid bank accounts and money market funds.

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Did you weigh up pros and cons of alternatives like investing the money which could be likely to give you a bigger deposit in a few years?

Apologies for stating the obvious. Just I know several people who slept walked into holding large cash balances for years and years because they can’t bring themselves to “pay a fortune for an average property” etc.

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Convert your EUR to CHF
Keep it on saving account like WIR/Willbe

Max your 3A contributions by VIAC, their mortgage offers with wir bank are good, depending on your second pillar and 3A holding you might not need the 20% Down paiement

Invest 20% on VT if you want to take some little risk

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100% agreed here. If history is anything to go by, the lower interest rate on Swiss francs will be more than compensated by the appreciation of the franc against the euro.

The best Swiss 5-year medium-term notes pay fixed interest of 1.8% per annum. Even if you could earn say, 4% on euro deposits, the chance that the extra 2.2% will be lost to euro devaluation is very high, based on current inflation rates.

Thanks for all your answers.
Quite disappointing with this sum sleeping on my account… And bringing me back approximately nothing. Missing some kind of “fonds euro” here…

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In the world of investing the two things generally don’t come together - certainty and high returns

You need to be willing to give up one of these.

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I have north of half a million sitting around since months for a RE purchase because we had to divest, and missed the recent market appreciation. This really pisses me off, but I know it was a the save bet. I’m currently using money market fund and WillBe to at least get something in return (around the 0.9% mark).

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I dont ask for high returns but looking for something pretty safe around 3% rate like theses “fonds euros”…

I understand the wish for it, but just to be sure: You are aware that you won’t get anything ‘risk-free’ above the current SNB interest rate (1.25%) in CHF, right?

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Yes, but now that it seems very difficult to buy real estate in Switzerland, maybe we won’t be able to stay in Switzerland when we retire.
So why not consider putting this financial contribution into an ETF that replicates the €STR like XEON (~3.8% currently).