The beginning of the year is a great time to think about where you are in life and where you’re headed. This isn’t just an ordinary new year though — it’s a whole new decade! It’s an opportunity to reassess decisions and set decisive goals.
Looking at your finances, one could decide on a 10-year plan which would be easy to monitor. You may plan to buy a car or a house over the next few years, save for your child’s education or even go on an overseas holiday. Whatever your goal is, it’s important to have a plan and set up appropriate investment accounts to see it through.
What is an investment account?
An investment account is separate to your savings and day-to-day banking account. It is an account where your money can be left to grow and work for you. An investment account through your bank would generally grow your money in the same way that your savings account would, but at a higher interest rate.
You also get investment accounts where your money is invested in shares. These investments don’t offer a guaranteed growth and fluctuate from month to month, but the rewards are potentially higher.
How does an investment account work?
Investment accounts offered at African Bank are easy to understand. They all offer a fixed growth (interest rate) for a period, which you are guaranteed to receive.
Fixed Deposits, Notice Deposits and Tax-Free Investment accounts all work in a very similar way and will earn you a competitive interest rate. The difference between Fixed Deposit accounts and Notice Deposits is the length of time that your money is invested for (the longer you invest, the more interest you earn). And Tax-Free accounts are different in that the interest you earn on your investment is not taxable.
What type of investment is right for me?
Knowing what your goals are can help you decide on the best strategy, given the various investment options.
If you know that you can invest your money for a set period between 3 and 60 months, then a fixed deposit investment could be a great choice.
Notice Deposits offer similar growth, but with the flexibility of being able to access investments within a short notice period of 7, 32 or 90 days. The longer the notice period, the better the growth on your money. Try out our Notice Deposit Calculator to find what works for you.
A Tax-Free Investment account is generally a good option for a longer term investment as you can gain a greater benefit from the tax free growth.
We know that plans change as our own circumstances change. Having a goal and a plan, however, means you’re geared for future success no matter what life throws at you.