Just for argument’s sake, say I am trying to save R200 a month for the next 12 months.
My first stop was FNB, which has a 32-day account that does not levy any charges at all. The bank escalates the interest from 4,35% for the first R200, which rises in the fifth month to 5,85%. What this means is that after 12 months I will have R2 463,75 — almost R64 of this money being interest.
Absa has an offering it calls the Absa MoneyBuilder account, which is ‘designed to grow your savings, while giving you instant access to your cash”. The account can be opened with as little as R50, does not attract any monthly administration fees and you get eight free Absa transactions every month.
The interest for sums between one cent and R10 000 is 3,75%. After an initial deposit of R200 and deposits of R200 over 12 months, my account will stand at R2 457,57.
Capitec Bank offers 10% interest on daily savings on balances less than R10 000. If I save R200 a month in a Global One Banking Facility at Capitec, I will earn 10% interest a year. After 12 months I will have R2 513,11 — total interest would be R113,11. After the bank deducts R36 I will be left with R2 477,11. Total interest from this product would be R77.
At Nedbank, the normal savings account requires a minimum opening balance of R50. It provides ‘ease of access and transactional functionality” and, because of this, people who have a significant number of transactions don’t get much in interest. A balance below R1 000 will earn about 1% in interest.
Nedbank has another product it calls NedTerm. This account requires a minimum balance of R1 000 and a further minimum monthly deposit of R100. This means I won’t get any interest in the first four months as my deposit will be below R1 000, only clocking up interest of 5,75% after the balance gets to R1 000.
With Standard Bank’s PureSave, there is no monthly management fee. The opening balance is R50, and after 12 monthly deposits of R200 I will rake in R59,55.
There you have it. Of course, interest earned on small sums is not significant but becomes a factor when dealing with larger amounts. A savings account offers a safe place to build your savings.