Rental deposit insurance12. März 2026|

Rental deposit insurance vs. bank deposit – the comprehensive cost comparison

Rental deposit insurance or bank deposit? We compare the costs, advantages and disadvantages of both options for tenants in Switzerland.

Rent guarantee through a bank deposit or rental deposit insurance? This is the question many tenants in Switzerland ask themselves. Both options have their merits – but the financial differences are greater than most people think. In this article, we compare the costs and show when each option is worthwhile.

How does the bank deposit work?

With the traditional bank deposit, the tenant pays the deposit – a maximum of three months' rent – into a blocked account at a bank. The money remains locked there for the duration of the tenancy and is only released at the end, provided the landlord has no outstanding claims.

The problem: the deposited money is tied up and cannot be used for anything else. Interest rates on rental deposit accounts have been virtually zero for years. At the same time, inflation erodes the purchasing power of the money every year.

How does rental deposit insurance work?

With rental deposit insurance, instead of paying the entire deposit amount, the tenant pays an annual premium to the insurer. The insurer issues a surety certificate to the landlord, which serves as security. In the event of a claim, the insurance pays the justified amount to the landlord and then recovers it from the tenant.

The major advantage: the money that would otherwise be locked in a blocked account remains freely available to the tenant – for moving costs, furniture or as a financial reserve.

Cost comparison: a worked example

Let us take a typical Swiss rental apartment with a monthly rent of CHF 1,500 (gross). The rental deposit therefore amounts to CHF 4,500 (three months' rent).

Bank deposit: CHF 4,500 blocked in the restricted account. At an interest rate of 0.1%, you receive just CHF 22.50 in interest after 5 years. The opportunity cost – i.e. the foregone benefit – is considerable: had you invested the CHF 4,500 in an ETF with a 5% return, it would have grown to over CHF 1,200 in 5 years.
Rental deposit insurance with goCaution: at an annual premium of approx. 4.75% of the deposit amount, you pay approx. CHF 214 per year, i.e. CHF 1,070 over 5 years. In return, CHF 4,500 remains at your free disposal.

When is rental deposit insurance worthwhile?

Rental deposit insurance is particularly worthwhile in the following situations:

You are moving to a new apartment and need your savings for the move and furnishing.
You still have an existing lease and the deposit on the old apartment is still blocked (double burden when moving).
You are self-employed or in the start-up phase and want to preserve your liquidity.
You simply do not have enough savings to lock CHF 4,500 or more in a blocked account.
You would rather invest your money or keep it available as an emergency fund.

When is a bank deposit worthwhile?

The traditional bank deposit can make sense if you have sufficient savings, the deposit amount does not represent a financial burden and you plan to stay in the same apartment long-term. In this case, you save the annual insurance premium.

However, one should bear in mind that even with sufficient savings, the money in the blocked account generates no return. The question is therefore: can you do more with the freely available money than leaving it in an account earning 0.1% interest?

Conclusion: flexibility over tradition

For the majority of tenants in Switzerland, rental deposit insurance offers the best value for money. It preserves financial flexibility, avoids duplication when moving and is easy to manage. With goCaution, you can take out your rental deposit insurance online in just a few minutes – without paperwork and without waiting times. Also read about when rental deposit insurance is worthwhile.

Rental deposit insurance12. März 2026

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