Even though South Africans’ saving culture isn’t the best, a significant amount of money is in savings accounts.Most of the money saved by individuals in South Africa is in bank accounts. The reality is that bank savings are not a great choice in terms of the returns they offer.
With a well-regulated financial industry, bank investments in South Africa are safe.
Fixed deposits are the best ways to save.
3 main types of savings accounts:
With these types of accounts you can access your money readily.
Investments are for indefinite periods of time.
These types of savings accounts tie up the investor’s money for a term specified in advance.
In South Africa, as of September 2016, the best savings account interest rate is 7.23%. Individuals can earn up to 13.25% on fixed deposits.
Tips on choosing the best savings account:
Do some research and read the fine print. The first step would be identifying how you will be using the funds. High-interest savings accounts are an ideal place to keep your emergency fund or any money to which you still need ready access.
To get the best savings account interest rates, compare rates. Without comparing rates, you may be short-changing yourself.
Keep your money liquid when interest rates begin to climb.
Keep in mind that terms differ. You may need to keep a certain amount in your account in order to earn interest. Something that may influence the interest you earn is the initial amount you add to your savings account – the minimum opening deposit.
You need to know yourself when comparing rates. This means being clear about how much you are willing to save as well as how often you’ll need access to your money.