Five ways to save your money
July is National Savings Month and according to the South African Reserve Bank, thousands of South Africans have their money in accounts that offer very low interest rates.
SAVINGS and investment accounts are a great way to encourage smarter wealth management and with July being National Savings Month, people are advised to move money if they are not getting a return.
According to South African Reserve Bank some 16 million South Africans have savings accounts, but they are emptier than they should be. About 40 per cent of this money sits in accounts that offer very low interest rates, if any interest at all.
Head of product and consumer value proposition at African Bank, Neil Thompson said it is time South Africans started becoming more savings savvy and there could be no better time than now.
“South Africans have been spoiled for choice this year with the introduction of a deluge of new banking options, all promising great deals and better prices,” said Thompson.
“This is great news for consumers who now have an opportunity to grow their wealth faster by just switching to an account with the best savings account interest rates and one with lower monthly fees,” he added .
CEO at MyTreasury, Warren Kopelwitz said efficient saving can make a massive difference to an individuals wealth.
“Moving your cash from a call account that offers returns of 3 per cent to a long-term fixed deposit with an interest rate of 10 per cent, for example, would effectively double your wealth over 10 years,” said Kopelwitz.
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Here are some savings tips:
• Check the savings rates that are being offered in your various accounts carefully. Banks may offer similar rates, but you need to check what balance you need to qualify for that rate. Lazy money, or deposits which sit in current or savings accounts earning very little interest, doesn’t make any sense.
• Don’t get caught unawares by high banking fees. You should compare apples with apples and see which bank offers you the most value.
• Apply for a debt consolidation loan. Debt consolidation loans are a great way to settle outstanding loan payments into one account at a rate that is affordable for you. This then allows you to continue saving without having the “leaky bucket” effect.
• Invest your savings. You need a monthly savings plan but saving money is not always enough. If you’re saving for a long-term goal, open a notice deposit or tax-free account which allows you to add money monthly while your investment matures.
• Use a financial adviser or visit your branch.
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