Vaneshan asks: I have R20 000 that I want to invest but have access to it in case of an emergency. What is the option for me?
Maya replies: The best option is to place the money in a high interest bearing bank account. Several banks offer easy access fixed deposit accounts that provide a high interest rate but allow you to access a percentage of your funds within 24 hours.
For example Nedbank EasyAccess pays a fixed deposit rate of 5,35% for six months but you can withdraw 50% of your money within 24 hours.
Capitec also offers aggressive interest rates, however only for balances under R10 000. For a daily savings account you would earn 6% on funds under R10 000 and 4,75% on amounts between R10 000 to R25 000.
Capitec’s six month fixed deposit would pay 6.15, on R20 000 and you can break this in an emergency, however you would forfeit the interest unlike Nedbank EasyAccess.
Another alternative is to invest half into the RSA Retail Savings Bonds which is currently paying 7,5% on a two-year fixed deposit and keep R9 990 with Capitec to take advantage of their higher rate for balances under R10 000.
If you do need to access the funds from the RSA Retail Bonds before the two year period, you can do so but forfeit the interest.
Sometimes however it is easier to have the funds with the same bank you bank with, so speak to your bank about the best interest rate products available but keep the above rates in mind so that you have an idea of whether or not it is a good deal.
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