Must Have Savings Accounts in South Africa

Saving can generally be described as income not spent,or deferred consumption.South Africa’s banking and financial services sector provide various methods of saving.These include deposit accounts,pension account,investment fund or even just as cash.

Bank savings accounts are not a great choice in terms of the returns they offer,but they make a good starting point for people who are just setting out on the savings road. Bank investments are also safe in South Africa as there is a well regulated banking industry which protects clients financial interests.The banking industry has also over the years seen more and more clients who would like to keep a certain percentage of their savings in a bank account where it earns some interest, but they can get access to it,in-case of emergencies.Below are three different types of savings accounts to consider.

Call Accounts – As the name implies, money in this account is “on call” in these accounts.You can access your money readily,by giving the bank notice which can be 24 hours notice.The process can be as simple as picking up a phone and making a call to the bank, or even doing the procedure online.There may be a minimum amount required to open a call account and interest rates can be as low as 2%.

Notice Deposits – Notice deposits are investments made for indefinite periods,but you cannot get access to your funds until a specified notice period has been served.The range of notice periods available is enormous.Some banks have a 21 day period, a 32 day period is common but other products have a 61 day period or even longer.The longer the notice period, usually the higher the interest rate offered.Interest rates with Notice Deposits tend to be more favourable than for call accounts.You will need a minimum amount to invest which varies from bank to bank and most banks offer tiered interest rates.This means that the more you invest or keep in the account,the higher the rate.

Fixed Deposits – Fixed deposits tie up the investors money for a term specified in advance,this term may be anything from one month to five years.The traditional fixed deposit offers fixed interest rate over the agreed term, which gives the investor certainty about what he or she would earn. Many banks also offer linked deposits which come with guaranteed minimum interest rate, but if interest rates increase above that during the term,so does the interest paid to the investor.This account offers the possibility of reasonable rates of interest on fixed deposits.These rates can run between 4.62% to 5.85%.