What R10,000 gets you in South Africa’s major savings accounts
The challenging economic environment is making it extremely difficult for South Africans to save.
Amidst high interest rates, several savings accounts are offering strong returns, well above the inflation rate of 5.1% for June.
Not only are savings useful for building wealth and hedging against inflation, but they are essential in an emergency.
However, Standard Bank’s data showed that many South Africans with earnings over R25,000 struggle to build emergency cash savings.
Standard Bank said that 52% of entry-level banking clients have less than one month of their salary saved in immediately accessible cash savings, which can be used in the event of retrenchment or urgent medical procedures.
The bank said that tough economic conditions and the high cost of living are the primary reasons for this trend.
Without savings, many are forced to resort to debt, eroding their ability to build wealth over the long term.
It’s not much better in the higher income bracket, as over a third of individuals earnings between R700,000 and R1 million having no emergency savings at all.
“The data shows that the ability to build adequate cash savings for use in an emergency is not only dependent on earning a higher income,” said Doret Jooste, Head of Money Management and Advisory at Standard Bank.
“Having cash savings on hand is the cornerstone of healthy money management and likely the most important thing to prioritise when you want to start building your wealth”.
With this in mind, BuisnessTech has looked at what consumer’s could get back from a savings account when putting away R10,000.
Fixed Deposit Account
Fixed deposit accounts generally offer the highest monthly interest rates, with periods ranging from 7 days to 60 months and over.
Banks have their own payout options, but it is common for interest payouts to be provided monthly, every six months, every twelve months, or at maturity.
We have decided to look at the interest rates for 6 months and 12 months using Investec’s future value calculator. Interest is paid monthly. Investec does not offer a minimum deposit of R10,000.
When comparing the results at 9 of South Africa’s biggest banks over 12 months, TymeBank comes out on top, offering an interest rate of 10.0%.
In last, Standard bank only offers 7.49% in interest over a 12-month period.
| Bank | Minimum Deposit | 6-month interest rate | 6-month future value | 12-month interest rate | 12-month future value |
| TymeBank | R0 | 8.80% | R10 448.15 | 10% | R 11 047.13 |
| Africanbank | R500 | 8.80% | R10 448.15 | 9.50% | R10 992.48 |
| Absa | R1 000 | 8.35% | R 10 867.71 | 8.75% | R 10 910.96 |
| Discovery Bank | R10 000 | 8.25% | R10 856.92 | 8.70% | R10 905.54 |
| Capitec | R10 000 | 8.15% | R 10 414.48 | 8.50% | R 10 883.91 |
| Nedbank | R5 000 | 7.75% | R10 803.13 | 8.15% | R 10 846.14 |
| FNB | R10 000 | 7.70% | R10 797.76 | 8.10% | R10 840.76 |
| RMB | R10 000 | 7.70% | R10 797.76 | 8.10% | R10 840.76 |
| Standard Bank | R1 000 | 7.48 % | R10 379.88 | 7.49 % | R10 775.26 |
Notice accounts
Despite offering lower interest rates than traditional fixed deposit accounts, notice accounts allow for quick access to funds if proper notice is given to the bank.
When compared to the banks that offer 32-day notice accounts that meet the R10,000 requirement, Africanbank came out on top, with an interest rate of 8.50%.
Standard Bank was again on the other end of the scale at 5.8%.
| Bank | Minimum Deposit | 32-day notice, nominal interest rate | 12-month future value |
| Africanbank | R500 | 8.50% | R 10 883.91 |
| Discovery Bank | R0 | 8.45% | R10 878.51 |
| Capitec | R0 | 7.50% | R 10 776.33 |
| Nedbank | R250 | 7.45% | R 10 770.97 |
| FNB | R5 000 | 7.25% | R 10 749.58 |
| RMB | R5 000 | 7.25% | R 10 749.58 |
| Absa | R1 000 | 7.15% | R 10 738.90 |
| Standard Bank | R250 | 5.80% | R 10 595.67 |
Immediately accessible savings accounts
FNB had the highest interest rate for immediately accessible savings accounts at 7.05%.
However, Tymebank’s 7% could rise to 11% if a customer completes ten or more transactions for three consecutive months and gives TymeBank 10 days’ notice before closing their GoalSave account.
Capitec was the worst performer, offering only 3.0% for immediately accessible savings.
| Bank | Minimum Deposit | Nominal interest rate | 12-month future value |
| FNB | R0 | 7.05% | R 10 728.23 |
| TymeBank | R1 000 | 7%* | R10 722.90 |
| Africanbank | R500 | 6.44%** | R 10 663.35 |
| Nedbank | R1 | 6.25% | R 10 643.22 |
| Discovery | R0 | 5.75% | R 10 590.40 |
| Standard Bank | R0 | 5.5% | R 10 564.08 |
| Absa | R50 | 5.2%*** | R 10 532.57 |
| Capitec | R30 | 3.00% | R 10 304.16 |
Read: Big storm brewing over Eskom price hikes in South Africa
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