This is how much money you need to be considered rich in South Africa
Measuring what it takes to be ‘rich’ can be highly subjective – especially in a country like South Africa where wealth inequality is among the highest in the world.
While a middle-class family with a humble home in the suburbs may be considered far richer than the half of the country that struggles to meet even basic food requirements each month, the level of indebtedness of consumers across all income levels means that even those that appear to be well-off may be struggling, financially.
For wealth researchers, the world’s richest are labelled ‘high net-worth individuals‘ (HNWIs), and the barrier for entry into that elite group is $1 million – which equates to around R12.5 million at current rates.
The $1 million mark isn’t ‘money in the bank’ wealth, but rather a measure of an individual’s net worth – total wealth, assets minus liabilities. So if you have a R12 million house and drive a R1 million car, but are stilling paying off the bond and financing, you’re not considered a high net wealth individual.
This measure of net wealth is also one of the metrics used by South Africa’s big banks when they look at taking on ‘rich’ clients.
South Africa’s major retail banks all offer a variety of banking products that cater for all markets – from entry level starter accounts, to mid- and higher-tier accounts that open banking to customers with more varied banking needs.
However, the level of banking that is reserved for the ‘rich’ is the world of private banking, which comes with strict requirements in order to be considered.
Private wealth
For South Africa’s top-rated private bank, Investec, in order to become a client, you need to be a professional (engineer, accountant, lawyer, doctor, etc) and need to apply and let the group run a credit check on you.
The bank does not have a standard base requirement, with its packages catered to individuals based on their financial needs and background. However, a report by the Financial Mail’s Investors Monthly in 2017 mentioned that a prospective Investec client would need to earn a minimum R800,000 a year (R67,000 a month), or have at least R20 million in assets.
Other prominent banks in South African have also stepped up their requirements to enter the world of the elite banking. FNB’s private wealth offering requires that a prospective private client earn R1.5 million per annum or have a net asset value of R15 million or more.
Nedbank Private Wealth carries the same salary requirement (R1.5 million per annum), but brings the necessary net asset value down to R5 million – while Absa’s Exceller Package doesn’t specify a net asset requirement at all, and has the lowest salary barrier of R750,000 per annum (R62,500 per month).
Standard Bank’s Signature account has a minimum salary requirement of R92,000 a month (or just over R1.1 million a year).
The table below outlines the various requirements needed to access private banking in South Africa, as well as an average value based on the numbers.
| Bank | Annual salary needed | Monthly salary needed | Investable assets |
|---|---|---|---|
| FNB Private Wealth | R1 500 000 | R125 000 | R15 million |
| Nedbank Private Wealth | R1 500 000 | R125 000 | R5 million |
| Standard Bank Signature | R1 100 000 | R92 000 | – |
| Investec Private Bank | R800 000 | R66 700 | R20 million |
| Absa Exceller | R750 000 | R62 500 | – |
| Average | R1 130 000 | R94 100 | R13 million |
Taking the above into consideration, the value to be considered a HNWI in South Africa is more or less on par with the $1 million used by researchers, in that the average ‘rich’ person who qualifies for private banking, would either have a monthly salary of R94,000 a month – or net assets worth R13 million.
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