Investing money instead of saving – what the figures really show

What happens if you leave 10,000 francs sitting in a savings account for several decades—and what if you invest it in a diversified portfolio of stocks? Saving feels safe. Investing money sounds risky. But if you know the numbers, you might think differently. In this article, we compare the long-term performance of a savings account with the world’s most well-known stock index, the MSCI World—using real data, concrete examples, and plain language. You’ll see why the seemingly safe choice can be the more expensive one in the long run—and what role compound interest plays in this. Welcome to the first lesson of our financial guide!

Overview | Lesson 2 >

Investing or saving money? The long-term comparison

Imagine two people. Both have saved 10,000 francs – and neither will need the money for decades to come.

Anna puts her money in a savings account. Safe, convenient, no surprises.

Beat decides to do things differently: He invests in stocks—specifically in a fund that includes the largest companies from all industrialized nations, the MSCI World. In doing so, he essentially buys a small stake in Apple, Nestlé, Toyota, and hundreds of other companies all at once.  

In the end, Anna looks at her account: 10,000 has become around 17,000 francs. Not bad – if it weren’t for inflation, which has quietly eaten up most of it.

10,000 becomes 180,000 francs

Beat, on the other hand, has over 180,000 francs in his account over the same period— 18 times his initial investment, with an average annual return of 8.4%.

How is this possible? The answer lies in three factors – one of which is particularly underestimated:

• Long investment horizon – time is the most important factor
• High returns – equities historically yield significantly more than savings accounts
• Compound interest – profits are continuously reinvested and in turn generate new profits

The uncanny power of the compound interest effect

The decisive factor is what happens to the profits. If the distributed dividends are spent every year, Beat ends up with around CHF 83,000. If, on the other hand, they are automatically reinvested, the money continues to work and in turn generates new profits. Profits on top of profits. Year after year. The result: over 180,000 francs.

The graph clearly illustrates the difference: In the top line, dividends are reinvested—allowing compound interest to work to its full potential. In the bottom line, dividends are paid out—limiting the impact of compound interest to capital gains. The gap between the two widens with each passing year.

This effect is called compound interest. Albert Einstein is said to have once called it the eighth wonder of the world—and the numbers prove him right.

In the long term, we are all dead

Now you might object: I don’t have that many decades. Fair enough.

So let’s assume a shorter investment horizon—say, ten years. In our view, that’s the minimum for equity investments. This is because stocks can fluctuate wildly in the short term: in a single year (2008), the MSCI World lost over 40% of its value!

Investing money: When is the right time?

This brings us to the next tricky issue: the supposedly right time to enter the market.

To do this, we let Anna and Beat invest their starting capital of CHF 10,000 in all possible 10-year periods since 1989 – and see what comes out of it.

We also assume that both Anna and Beat leave the income in the form of interest or dividends in their investment. This means that both benefit from the compound interest effect.

In almost all 10-year periods, equity investments yield significantly higher returns than savings accounts – with just one exception.

In Anna’s case, the period 1989-1998 shines with 3.28% per year. The worst period is 2013-2022: a measly 0.17% nominal.

Beat achieved its best return in the period 1990-1999: a whopping 15.14% per year. The worst period was 1999-2008 – an annual loss of 1.23%. Twice as bad luck: Beat entered the market at the dotcom peak of all times, and the 2008 financial crisis wiped out his performance shortly before the end of the ten-year period.

The problem is that we don’t know the right time to start—and those who wait for it often wait too long. The solution is as simple as it is effective: invest money regularly instead of speculating on the perfect moment. Those who invest monthly buy sometimes at high prices and sometimes at low prices—thereby smoothing out the impact of price fluctuations over time.

Particularly striking: Starting in the 2013–2022 period, the savings account no longer kept pace with inflation. Anyone who left their money there lost purchasing power despite the nominal interest.

Please note: We have not taken currency risks, costs and taxes into account in our calculations.

The savings account is free and the fees for ETFs are minimal these days – often less than 0.2% per year. We will discuss currency risks and taxes in later lessons.

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Conclusion

The figures are clear: investing money – long-term and broadly diversified in shares – generates significantly higher returns than a savings account. Compound interest does its work silently and quietly – the longer, the more powerful. There is no such thing as the “right” time to invest – and if you wait, you lose valuable time.

This lesson has shown what was historically possible – not what is guaranteed. Whether and how you invest depends on your personal situation and your risk profile. This is what the next lessons are about.

In lesson 2, we take a closer look: What’s behind the relationship between risk and return – and why is there never one without the other?

You can find an overview of all the lessons here: Learning to invest – in eight lessons.

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Updates

June 12, 2026: Minor adjustments made.

2026-03-27: Text and data updated.

Disclaimer

Disclaimer: Investing involves risks of loss. You must decide for yourself whether you want to bear these risks or not.

Errors excepted: We have written this article about investing money to the best of our knowledge and belief. Our aim is to provide you as a private investor with the most objective and meaningful information possible on the subject of finance. However, should we have made any errors, forgotten important aspects and/or no longer have up-to-date information, we would be grateful if you could let us know.