When it comes to the savings plans that are on offer in South Africa, there definitely is no shortage of options. This can often result in a phenomenon known as the paradox of choice. According to this phenomenon, having too many options causes stress and overwhelm instead of happiness.
To simplify things, a route that many people opt for is opening a savings account at the bank they’re currently with. While this is probably the easiest choice, it may not always be the best option for you. In this blog post, we’ll unpack why that is.
In an article published by BusinessTech, the journalist compared 8 popular banks and their savings account options in South Africa, mainly:
- African Bank
- Discovery Bank
- Nedbank
- Absa
- First National Bank
- Rand Merchant Bank
- Standard Bank
- Capitec
When considering each of the banks savings options, the journalist looked at three different savings account-types and their competitive interest rates. Looking for the best savings account interests rate in South Africa? Read on...
Fixed deposit (fixed term) savings plan
- How it works: an amount is transferred into the account, and usually, both this capital amount and interest rate is fixed and can be withdrawn after the time period chosen. These time periods range from 7 to 60 months, and sometimes even longer depending on the bank.
- Pro: usually offers higher interest rates than an average savings account.
- Cons: usually a penalty fee associated with immediate withdrawal of funds and often a minimum deposit required.
- Bank offering the highest interest rate: Discovery Bank
- 6 months: 6.9%
- 12 months: 8.05%
*It is important to note, however, that the minimum amount you can deposit into this account to get this interest rate is R10 000.
Notice deposit savings account
- How it works: a notice deposit is similar to an ordinary savings account, but as the name suggests, the individual has to give notice to withdraw their funds.
This notice period will differ depending on the type of notice account the person signs up for. Unlike a fixed deposit account, there isn’t a maturity date (date where the funds must be withdrawn and given to the investor). - Pro: usually higher interest rates than a normal savings account.
- Con: will likely pay a penalty fee if funds are withdrawn without giving adequate notice.
- Bank offering the highest interest rate: Discovery (Notice savings account)
- For a 32-day notice account, you can get an interest rate of 6.45%.
Immediately accessible savings account
- How it works: as the name suggests, these accounts give investors the freedom of accessing their money at any time they would like.
- Pro: immediately accessible funds
- Con: interest rates are usually considerably lower than fixed deposit or notice deposit savings accounts.
- Bank offering the highest interest rate: African Bank (Access accumulator)
- Interest rate of 5.5%
Meerkat’s savings solution not only offers the best interest rates, but also beats these banks in other categories:
- When you invest with us, the minimum amount you would need to invest is only R5000 to start earning interest. To get the highest interest rate with Discovery Bank, the minimum amount you would have to invest is R10 000.
- Over 12 months, the highest interest rate you can get at Discovery Bank is 8.05%. At Meerkat, we currently offer 8.6%, but that’s not all.
- This is what makes our savings solution really stand out:
- Our interest rate is linked to the inflation rate (CPI) in the country. This means that as inflation increases, so do our interest rates. This is essential, especially during a time when we are seeing interest rates increase so frequently.
- Not only are our interest rates linked with the inflation rate, we aim to pay CPI +1% which maintains the real value of the savings and beats inflation. Why should you care about inflation? As inflation increases, the value of your money decreases.
*At the time of writing this blog post, CPI is at 7.6%.
With our savings solution, you can also:
- Access your money at any time. Forget about maturity dates to reap the benefits of high interest rates, reap the benefits now!
- If you don’t have R5000, you can start saving with as little as R25 to build up to R5000 so that you can start earning interest.
- Save on account fees—there aren’t any. What’s yours is really yours.
- For every R100 you save, stand a chance to win R1000. With Meerkat, we pay you for saving.
Who is Meerkat?
Meerkat is a financial wellness company that wants to help South African consumers do MORE with their money. We can help with debt repayment negotiations, provide affordable insurance and help you kickstart an emergency fund
Fill in the contact form on our website to receive a free callback from the Meerkat team today.
MyMeerkat FSP is an authorised financial services provider (FSP 50979) and registered Debt Counsellor - NCRDC2613.