R5000 is a significant amount of money, one that can be enough to earn you a noticeable interest over the course of your life. This is a guide on where to invest R5000 in South Africa.
Investing depends largely on your goals; there are safer ways to invest and riskier ways to invest. More risk usually carries more reward.
Invest in an ETF
An ETF is a great way to invest in the stock market while keeping your money safe. 96% of traders don’t beat the stock market in the long run. An ETF is sort of like a basket that mirror the stock market. When you buy an ETF; you are automatically buying shares in the strongest companies.
You can always buy individual stocks but the risk is that the company shares might go down for a very long time and not recover just as easily. With an ETF, you will be investing in companies like Sasol, Absa, MTN and Nedbank. Getting started is easy, all you have to do is to open an EasyEquities account and you are good to go.
ETFs generally have good returns in the long term; you can get returns that are as much as 30% per year on certain EFTs. Especially US based ETFs like Vanguard.
Invest it in a bank
If the idea of investing your money in the stock market sounds intimidating to you; then you can just put your money in the bank and earn interest on it. You need more than R5000 in most banks in order to be able to make a fixed deposit. The best option is currently putting it in a savings account with TymeBank. You will get a yearly interest rate of 7% and up to 8% if you receive your salary through TymeBank.
