Savings account are a great way to save up money for some of the important things while earning interest. It’s very easy to withdraw money from a savings account, most banks require a 32 days notice. Savings account are a vehicle to save money and should not be looked at as a way to invest money.
Daily Income compared all the savings accounts from the major banks in South Africa. These are the banks with the best interest rates for savings in South Africa.
1. African Bank
African bank offers an interest rate of 6.75% on a tax-free savings account. This is currently the best rate in South Africa. Some other banks are not able to give an interest rate of 6.75% on fixed deposits and money market accounts.
The interest that you earn from your savings with African Bank is completely tax free, the maximum amount that you can deposit is R36 000 per year. The minimum deposit is only R50. It’s fair to mention that most banks offer a tax-free savings account but none other comes with such a high interest.
You earn an interest rate of 5% for a notice deposit of 32 days and 5.65% for a notice deposit of 90. This is for people that want to save more than R36 000 and not use the tax-free savings account. But if you are planning to save less than R36 000; it’s best you take the tax-free savings account.
2. Tyme Bank
Tyme Bank offers a savings account named GoalSave, which requires you to open a bank account with Tyme Bank. The interest rate ranges between 4% and 8%. The only way to get an interest of 8% is if your salary is paid into a TymeBank account.
The interest rate from TymeBank is an interesting one because it grows over time. You don’t get into a fixed deposit of R500 and earn a fixed percentage until maturity. They reward you for saving more and not making any withdrawals, the longer you don’t make a withdrawal; the more the percentage on interest increases.
You get a 4% interest if you withdraw your money in less than 30 days. The interest rate goes up after 31 days to 5%, then goes up after 90 days to 6%. You get an extra 1% if you give them a 10-day notice, adds up to 7%. That’s really sweet.
3. Standard Bank
Standard bank offers an interest rate of 1.35% on it PureSave savings account. This is not much to be exited about as it way less than the rate of inflation. However, Standard Bank as a notice deposit savings account that let’s you request a withdrawal from 7 days. The maximum possible interest is 4.25%.
4. Nedbank
Nedbank offers are interest rate of up to 3,45% for savings of R100 000, which you can withdraw after a 32-day notice. There a lot of products offered by Nedbank which might seem weird or confusing. They offer an interest rate of 3.70% for an electronic savings account for balances over R100 000.
5. Absa
The interest rate on savings on a notice deposit from Absa ranges from 2.40% to 3.85%. The highest rate you can get for a balance less than R25 000 is 2.70%. Balances over R25 000 enjoy an interest rate of 3% minimum, on condition that they give a 45-day notice.
6. FNB
The interest rate on savings ranges between 2% and 3.5% of FNB. Only accounts that have balances over R75k earn an interest of 3.5%.
7. Capitec Bank
Capitec banks offers a really low interest rate on a savings account. Which is disappointing because they offer such a high interest rate on fixed deposits. The interest rate offered by Capitec Bank is only 2.25% on anything under R100 000 and only goes up to 2.50% for anything over R100 000.
Conclusion
This comparison was strictly on savings accounts and not on fixed deposits or other products. Tyme Bank beats the African Bank in theory and is deserving of the number one spot but it has some limitations, which is why it ranked 2nd. Do you have any thoughts or questions? Comment below.
