Emergency Fund
Why you keep a cash buffer before you invest, how to size it from your monthly expenses, and where to keep it in Switzerland so it's safe and quick to reach.
Key idea
An emergency fund is cash set aside for the unexpected, so a lost job or a big bill doesn't force you to sell investments or borrow. A common rule of thumb is three to six months of essential expenses, often kept in a savings account where it's safe and quick to reach.
What it is
An emergency fund is cash set aside for the unexpected: a broken washing machine, a dentist's bill, a gap between two jobs. It usually comes before investing, because investments can be down just when the money is needed. Without a buffer, a bad month can mean selling shares after a fall, or borrowing at a high rate that compounds against you.
How big it usually is
A common rule of thumb is three to six months of essential expenses. It's a starting point, not a fixed amount. Enter what you spend in a month, or move the slider:
- 3 months: CHF 12,000
- 6 months: CHF 24,000
With CHF 4,000 of expenses a month, 3 months is CHF 12,000 and 6 months CHF 24,000. The rule counts what would have to be paid if income stopped, such as rent, health insurance and food, rather than a whole salary.
What moves you up or down the range
Where someone lands depends on how quickly their income would come back and who relies on it. Under the Swiss rules in 2026:
Employees
After a dismissal, the salary keeps coming for the notice period: by law one to three months after the trial period, depending on years of service, unless a written contract, a standard employment contract or a collective agreement says otherwise; only a collective agreement can go below one month, and only in the first year of service. Unemployment insurance then pays 80% of the insured earnings, your average pay over your last six months of contributions, or over your last twelve if that was higher. It pays 70% for people with no children under 25 to support, insured earnings above about CHF 3,800 a month and no disability pension for a degree of disability of 40% or more.
Self-employed
No unemployment insurance at all, and income that can stop without notice. The self-employed often aim for the top of the range, or beyond it.
Family and home
Children, a single income in the household or a house that needs repairs all tend to push the number of months up.
Unemployment insurance has limits worth knowing. Under the Unemployment Insurance Act (AVIG) it usually pays only after at least twelve months of work with contributions in the two years before. It counts a salary only up to CHF 148,200 a year, the ceiling of compulsory accident insurance. Benefits start after a waiting period, 5 days as a rule: none on low earnings, and 10 to 20 days for people without children under 25 whose insured earnings exceed CHF 60,000 a year. And someone who quits without a new job lined up usually loses 31 to 60 days of benefits.
Where it is kept
A common choice is a savings account at a Swiss bank, separate from the account you spend from, so the money is safe, earns a little and doesn't get used by accident. Savings accounts often limit how much can be withdrawn at once, which is worth knowing before the money is needed. Deposits are protected up to CHF 100,000 per customer at each bank.
Shares can be down just when the money is needed, and Pillar 3a stays locked until a few years before retirement. How quickly different kinds of money turn into cash is what liquidity describes.
The honest caveat
Cash is safe, but it isn't free. In August 2026 the savings rates Swiss banks published averaged 0.07%, according to the Swiss National Bank, while consumer prices were 0.8% higher than a year earlier, as measured by the Federal Statistical Office. So a buffer slowly lost buying power: its real return was negative. That's the price of safety, and the opportunity cost of holding the money in cash. The bigger the buffer, the bigger this cost.
Swiss note
Deposit protection, run by the banks' joint scheme esisuisse, covers up to CHF 100,000 per customer at each bank. The Banking Act caps the banks' total commitment at 1.6% of all protected deposits, at least CHF 6 billion; from July 2026 to June 2027 that's CHF 8.1 billion for the whole system. A joint account counts as one separate customer, with one CHF 100,000 limit. If a bank fails, the payout currently takes several weeks; from 2028 the target is seven working days after you send your payment details. Pillar 3a money, and pension money held outside a pension fund, between jobs for example (vested benefits), isn't covered by esisuisse. It is privileged instead, up to CHF 100,000 and separately from your other deposits: in a bankruptcy it is paid back before the bank's ordinary debts. Add up what you hold in accounts at each bank: the protection covers CHF 100,000 per bank.
Key takeaways
- —A buffer usually comes before investing, so a bad month doesn't force a sale.
- —Three to six months of essential expenses is a rule of thumb: CHF 4,000 a month means CHF 12,000 to 24,000.
- —The self-employed, single earners and families often aim for the upper end or more.
- —Deposits are protected up to CHF 100,000 per customer at each Swiss bank, within a limit of CHF 8.1 billion for the whole system.
Related concepts
Liquidity
How fast your money turns into cash, and what that costs.
Interest Rate
How the SNB's rate reaches your savings account and your mortgage.
Time Horizon
When you'll need the money decides how much risk it can take.
Opportunity Cost
Every franc you place somewhere is a franc you can't place elsewhere.
Real Return
The return that counts is the one left after inflation.