Liquidity
How quickly you can turn something into cash without losing value, why cash, shares, bonds, property and pension money sit far apart, and what locked money costs you.
Key idea
Liquidity is how quickly you can turn something into cash without losing value. Cash is instant, shares take days and may be down when you sell, property takes months, and pension money is locked for years. Liquid isn't the same as safe, and locked isn't the same as bad.
What it is
Liquidity is how quickly you can turn something into cash without losing value. Two things count: how long it takes, and what it costs you to do it quickly. Cash is perfectly liquid. A house isn't: you can sell it, but it takes months, and selling in a hurry usually means a lower price.
From cash to locked money
Here's roughly where common ways of holding money sit, from most to least liquid:
Most liquid
Cash and current account:
Available today
Costs nothing to use.
Savings account:
Usually within days
Many banks limit withdrawals, and larger sums can need notice.
ETFs and stocks:
Sold in seconds, money two trading days later
You get the price at that moment, minus fees and stamp duty.
Bonds:
Sold within days
At the market price, which is lower if rates have risen; some bonds rarely trade.
Real estate:
Months to sell
Agent and notary fees, and a cantonal tax on the gain.
Pillar 3a:
From five years before the reference age
Earlier only for a home, leaving Switzerland, starting a business and a few other reasons.
Pensionskasse:
At retirement, from 58 at the earliest if your fund allows it
Earlier for a home, leaving Switzerland or starting a business.
Least liquid
Cash and a current account are available today. A savings account usually pays out within days, though many banks limit withdrawals. ETFs and stocks sell in seconds on the Swiss exchange, with the money arriving two trading days later, and bonds within days, at whatever the market pays. Real estate takes months.
Pillar 3a money is locked until five years before the reference age, the official retirement age (65 for most people), under the ordinance on Pillar 3a (BVV 3). Money in your pension fund, the Pensionskasse, is locked until you retire, from 58 at the earliest if your fund allows it. Both have a few exceptions, such as buying a home.
Say you sell CHF 10,000 of a foreign ETF listed on the Swiss exchange, on a Monday, through a Swiss broker. The money arrives on Wednesday, minus CHF 15 of stamp duty and the broker's fee.
Liquid does not mean safe
An ETF can be sold today, but if the market has just fallen 30%, selling today turns that fall into a loss you keep. How far prices swing is what volatility measures. A savings account is both liquid and stable. Real estate is neither: slow to sell, and its price can fall too. Each asset class has its own mix of speed and swings.
The honest caveat
Liquidity shrinks when you need it most. In a crash, prices fall just when many people want to sell. Some investments only pay out on a schedule: open-ended Swiss real-estate funds pay back units at the end of their financial year, after 12 months' notice. If you ask when giving notice, the fund may pay you back after the end of the current financial year instead, as long as it can do so for everyone who asked. Units of listed funds can still be sold on the exchange, at whatever price buyers offer.
Locked money isn't a mistake, though. Pillar 3a and the Pensionskasse make up for the lock with tax breaks. It just means that money can't be your emergency fund.
Swiss note
On the Swiss exchange, the money and the shares change hands two trading days after a trade; from 11 October 2027 it will be one, as SIX has announced. Under the occupational pensions law (BVG) and its home-ownership ordinance, pension fund money can be taken out early to buy a home you live in, until three years before retirement: at least CHF 20,000, and at most once every five years; over 50, the amount is capped. If you move to an EU or EFTA country and are insured under its mandatory pension system there (in Liechtenstein, living there is enough), the legally required minimum part of your pension fund money can't be paid out in cash (FZG). That part stays in Switzerland, in a vested-benefits account with a foundation or a vested-benefits policy with an insurer, until it can be paid out. Check how much your savings account lets you withdraw without notice.
Key takeaways
- —Liquidity is about speed and cost: how fast you get cash, and what you lose by doing it quickly.
- —Shares and ETFs sell in seconds; on the Swiss exchange the money arrives two trading days later, one from October 2027.
- —Pillar 3a and pension money stay locked for years, apart from a few exceptions such as buying a home.
- —Liquid doesn't mean safe: an ETF can be sold today, but perhaps after a 30% fall.