When is rental deposit insurance worthwhile?

In brief: instead of depositing the rental deposit (up to three months' rent) in a blocked account at a bank, you take out an insurance policy. You pay an annual premium – at goCaution, 4.5% of the deposit amount – and the insurer issues the landlord with a surety certificate. The money that would otherwise be blocked remains available to you.

It is the classic scenario: you have found a new apartment, need to provide a new deposit, but the deposit on the old apartment is still in the blocked account. Suddenly you need CHF 9,000.

Rental deposit insurance solves this problem elegantly: for the new apartment, instead of the full deposit amount, you only pay the annual premium. You do not have to wait for the release of the old deposit and can carry out the move without a financial double burden.

Young adults moving into their first apartment often do not have sufficient savings to pay a deposit of CHF 3,000 to CHF 5,000 on top of furniture, furnishings and moving costs.

With rental deposit insurance, you can move into your first apartment without going into debt or having to ask your parents for money. The annual premium is manageable and can be easily incorporated into a monthly budget.

Self-employed individuals and entrepreneurs need their capital for business operations. A commercial rental deposit can quickly amount to CHF 10,000 to CHF 30,000 (up to six months' rent). Locking this money in a blocked account can be existentially threatening for a young business.

Rental deposit insurance secures your liquidity: instead of tying up five-figure sums, you pay a calculable annual premium and invest the freed-up capital in your business.

With a monthly rent of CHF 3,000, the deposit amounts to CHF 9,000. The higher the deposit, the greater the leverage effect of rental deposit insurance. Whilst CHF 9,000 in a blocked account generates no meaningful return, you could achieve considerably more with it elsewhere.

Worked example: for a deposit of CHF 9,000, you pay goCaution an annual premium of approx. CHF 428. If instead you invested the CHF 9,000 at an average return of 5%, you would earn CHF 450 per year – more than the premium costs.

To be fair, there are also situations where a traditional bank deposit may make more sense:

In most life situations, rental deposit insurance offers a clear advantage: financial flexibility. Whether it is a move, career start, starting a business or a high deposit, rental deposit insurance from goCaution protects your budget and gives you the freedom to decide how you spend your money. The process takes just a few minutes and is fully digital.