This is incorrect. If you declare the interest income correctly, you will receive the 35% back. For your convenience the tax office will calculate the refund with your income tax, so it’s easier for you.
The illustration is in german, but you can translate.
Why do you invest in EUR deposits if you are living in Switzerland? Long-term you will most probably lose money as @almi pointed out.
You could put your money in $BOXX [1][2]. Proceeds from this investment are currently considered tax-free on Switzerland. But again, it’s USD.
[1] Alpha Architect 1-3 Month Box ETF - Alpha Architect ETFs
[2] High yield with box spreads - #5 by Helix