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Banking

Best bank to invest money in South Africa

There are a lot of banks in South Africa, choosing a bank that’s best to invest your money in can be overwhelming. We looked at all investment assets that are offered by South African banks, ranging from savings accounts to money market accounts. We compared all these in order to find out which is the best bank to invest money in South Africa.

After comparing all financial products and investment assets across the major South African banks. We have concluded that African bank is the best bank to invest money in South Africa. With the highest interest rate of 12%.

Interest rate

The interest rate is the most important thing to look at when comparing financial products from banks. It matters a lot when choosing where to invest your money, always invest your money where you get the best interest.

Your interest rate should always beat inflation, don’t make the mistake of investing in a fixed deposit or savings account that only offers 2% interest while the inflation is at 4%. This is because your money will lose more value even though its earning interest because the interest doesn’t beat the inflation.

Here are the banks with the best interest rates on investments in South Africa.

1. African Bank

African bank has the best interest rates on investments in South Africa. The lowest possible interest is 5.5% while the highest possible interest is 12.22%. A lot of banks don’t offer even 8% interest on their financial products.

The return of 12.22% applies when you invest over a period of 5 years, while the 5.5% applies over a period of 3 months. Both of these rates beat the inflation because the inflation rate is currently hovering around 4% in South Africa.

12.22% interest doesn’t only outperform the interest offered by other banks but it beats a lot of other investment assets like bonds and mutual funds.

2. Tyme Bank

Time bank offers its users a financial product that allows them to save money while earning interest. This product is named GoalSave, it currently has a maximum interest rate of 8%. You only get the 8% interest if your salary is paid to Tyme Bank but the highest you can go is 7%, if you don’t want to receive your salary through Tyme Bank.

It’s important to mention that you only have to wait 90 days before getting an interest of 7%, which is an incredibly short period.

3. FNB

FNB offers up to 7.80% interest on fixed deposits. It’s important to note that this interest rate is based off a 5-year investment period. Shorter investment periods have lower yields; you may only get an interest of 3% if you invest for 6 months.

4. Finbond Mutual Bank

Finbond currently offers an interest rate of 7.75% which is slightly higher than the one offered by Capitec Bank. However, the minimum amount of money that you can invest is R100 000, which might not be possible for a lot of people. But this is a very good interest rate if you are a pensioner or do have the R100 000.

5. Capitec Bank

Capitec Bank offers a nominal interest rate of up to 7.50% but the effective interest rate is as high as 7.76%. However, you need to invest a minimum of R25 000 in order to enjoy this interest rate, something that might be hard for students.

Deposits less than R25 000 earn an interest rate of around 5.75%, which still beats the inflation. It’s important to note that these interest rates apply for longer investment terms on fixed deposits. If you only plan on investing for 6 months then expect an interest rate of only 3%.

6. Standard Bank

Interest rates vary from product to product on Standard Bank but the highest possible interest rate that you can get is currently 6.40%. On the Flexi advantage investment account.

This is a good rate considering that the opening deposit is only R1 000 and it is an incredibly short-term investment at just 12 months.

7. Nedbank

Nedbank offers an interest rate of 5.60% on a 5-year investment for deposits over R1million but the rate falls down to 5.50% for deposits from R25 000 to R249 000. It falls down further to 5.30% for deposits under R25 000.

This rate of interest is not going to build up your money quickly or make you retire comfortably. But it will protect your money from inflation.

8. Absa

Interest rates for fixed deposits at Absa range from 3% to 5.45% for deposits under R100 000 and up to 5.95% for deposits over R100 000.

Conclusion

These interest rates were compared from different categories, such as savings accounts, fixed deposits and money market accounts. African Bank came out as the best bank to invest your money in South Africa overall. Do you have any thoughts or questions? Comment below.

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