Investing money is one of the best ways to grow your money, most banks offer a way to invest money and earn interest. Does Capitec Bank have an investment account?
Yes, Capitec does have different investment accounts, you can invest in different accounts in Capitec and earn a pretty good interest.
Savings account
The default savings/transactional account already pays you an interest on your balance, which works out to be around 2% per year. This is pretty good but it’s still below the inflation rate, it’s very important to put your money in an account that earns you more interest than the inflation rate.
You will get interest by just opening a Capitec account and having money in it; you are probably getting this interest but you are not aware of it. Just check your bank statement for the past 3 months, you will see interest from Capitec, usually paid at the end of the month. It can be a small as R1 or very high, depending on your account balance.
Tax-Free savings account
This account is not exclusive to Capitec Bank, other banks offer tax-free savings accounts but the interest rates are not the same. You get to invest money into a savings account and not pay tax on the interest that you earn.
The maximum amount that you can invest in a tax-free savings account is R36 000 per year, anything more than that will be taxed at 40%. Most tax-free savings accounts have an interest beating inflation rate.
Flexible savings account
This is not really an investment account; it’s a savings account at its core. You earn almost the same interest rate that you earn with a regular transactional account. The main purpose of this account is to help you to budget for something.
It helps to separate your money so that you can track exactly how much goes into different departments of your life. You can name the account anything you like; you can even name it “December Fun” and save up money that you will spend on December.
Fixed term savings plan
The fixed term savings plan allows you to make a one-time deposit for a period of time. This means that the money will be locked until it matures. This is where you start earning interest, depending on how long you invest and how much you invest.
Someone who invests R100 000 over 60 months will earn way more interest than someone investing less over a lesser time period. The minimum deposit seems to be R10 000, which earns you 4% over the course of 6 months.
Time seems to have a lot more impact on the interest rate than the amount of money you invest. You can get a nominal interest rate of 7.50% after 50 months on the same amount of money you would have earned 4% on after 6 months.
How to invest
You can access most of the savings’ accounts directly from your remote banking app. For the more serious ones; you will have to go directly to your nearest Capitec branch.
Conclusion
Capitec does have investment accounts, how do you think these compare with other banks? Leave your thoughts and questions below.
