Putting R10,000 in South Africa’s major savings accounts – what you get from fixed deposit vs notice vs savings
In light of the rising cost of living, putting money away has become harder for South Africans, making it more important that the little you can stow away works for you.
According to Sebastien Alexanderson, the founder of National Debt Advisor, South Africans are overindebted, with the average consumer spending up to 75% of their disposable income on debt repayments, leaving little space to save.
Findings from Old Mutual’s Savings and Investment Monitor Survey (OMSIM) showed that the majority of households would not last more than three months without a salary (61%), while 39% said that they could.
Despite headline inflation showing signs of easing, savings are still under strain as core expenses such as petrol, electricity and food all remain high.
Many of South Africa’s major banks offer savings facilities for consumers, all with varied rates for returns. BusinessTech looked at what is on offer, and how much you could get back when putting away R10,000.
Fixed deposit accounts
Fixed deposit accounts often offer the highest monthly interest rates, and periods can vary in range from 7 days to 60 months or more. These accounts offer a fixed rate of interest throughout the duration of the investment.
South African banks may differ in the way they handle payout options; however, it is common for interest payouts to be provided either monthly, every six months, after 12 months or at maturity.
Customers who wish to access and withdraw a portion or all of their fixed deposit are likely to suffer a proportional penalty fee.
Here’s how much you would have if you invested R10,000 in these fixed-deposit accounts:
(Note: All future values are calculated through the Investec future value calculator with interest being paid out monthly, NACM – nominal annual compounded monthly. Investec itself does not offer a minimum deposit of R10,000)
| Bank | Minimum deposit | 6-month interest rate (R10,000) | 6 -month future value | 12-month interest rate (R10,000) | 12-month future value |
|---|---|---|---|---|---|
| Discovery | R10 000 | 6.90% | R10 350 | 8.05% | R10 835 |
| African Bank | R500 | 6.79% | R10 344 | 7.87% | R10 816 |
| Absa | R1 000 | 6.30% | R10 319 | 7.55% | R10 781 |
| First National Bank | R10 000 | 6.50% | R10 329 | 7.75% | R10 803 |
| Capitec | R10 000 | 6.00% | R10 303 | 7.15% | R10 738 |
| Rand Merchant Bank | R10 000 | 6.50% | R10 329 | 7.75% | R10 803 |
| Standard Bank | R1 000 | 6.60% | R10 334 | 7.58% | R10 784 |
| Nedbank | R5 000 | 6.60% | R10 334 | 7.45% | R10 770 |
Notice accounts
Notice accounts offer slightly lower interest rates than a traditional fixed deposit account. However, they allow for access to funds in savings if necessary notice is given to the bank.
(Note: All interest rates were based on a balance of R10,000)
| Bank | Account name | Minimum deposit | 32-day notice, nominal interest rate | 12-month future value |
|---|---|---|---|---|
| African Bank | Notice Deposits Account | R100 | 5.61% | R10 575 |
| Discovery | Notice Savings Account | R0 | 6.45% | R10 664 |
| Nedbank | 32-Day Notice Investment Account | R250 | 5.70% | R10 585 |
| Absa | Notice Select | R1 000 | 5.25% | R10 537 |
| First National Bank | 32-Day Flexi Notice | R5 000 | 5.25% | R10 537 |
| Rand Merchant Bank | 32-Day Flexi Notice | R5 000 | 5.25% | R10 357 |
| Standard Bank | Notice Deposit Account | R250 | 4.15% | R10 422 |
Immediately accessible savings accounts
The following accounts offer low-interest rates but the luxury of having immediate access to funds placed in the savings account.
| Bank | Account name | Minimum deposit | Nominal interest rate | 12-month future value |
|---|---|---|---|---|
| African Bank | Access Accumulator | R500 | 5.50%* | R10 564 |
| Discovery | Demand Savings Account | R0 | 4.00% | R10 407 |
| Absa | TrueSave | R50 | 5.10%** | R10 522 |
| First National Bank | Savings Account | R0 | 5.05% | R10 516 |
| Capitec | Transaction and savings | R25 | 4.00% | R10 407 |
| Standard Bank | PureSave Account | R0 | 4.35% | R10 443 |
* Applicable only for 24 months
** Standard rate of 3.20% plus digital bonus
Read: SARS is making 2 changes that taxpayers should know about
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