Instead of spending money on gifts that people may not necessarily want, why not downscale on the gifts and open an investment account! This is a gift to yourself that’s worth every cent and one which will benefit you in the future!
You can start off with just a small amount and top it up as and when you can afford to. It can also be a good idea to open an investment account for your child and ask friends and family to contribute to this instead of buying gifts. This is particularly valuable when your child is too young to even understand what birthday or Christmas gifts are all about.
When looking for the best investment options one needs to first decide on the purpose of the investment/s. Knowing the reason why you’re starting the investment can help you decide on the best product. Consider the timeframe that you plan to invest for as well as whether you need access to the funds before your goal date.
Saving up for a deposit for a car may be a short-term goal whereas planning for your new-born’s education would be a long-term goal.
Understanding your reasons for starting an investment will help you decide what type of investment account you need.
Here are some of the investment banking options available from African Bank.
Tax Free investment
Tax Free investments are a great way to invest for your future by taking advantage of the tax free growth. Such an investment is often considered for a longer term as you will gain a greater tax advantage the longer you keep your funds in the investment.
In this type of investment, you will have access to your funds at any time and will be able to use the account in a similar way as an ordinary savings account. There are however annual and lifetime contribution limits that are set and revised by Treasury and it’s worth understanding these.
The current annual contribution limit is R33,000 and the lifetime contrition limit, R500.000.
Fixed deposit accounts are accounts where you deposit a fixed sum, for a fixed term and a guaranteed rate. You are not able to access that money at all for the period, but you’ll be rewarded with a higher interest rate than a standard account. The longer you commit to leaving your money, the higher the interest rate.
Notice accounts provide you with the comfort of easy access to your money by giving advance notice. Either 7, 32 or 90 days notice is required but the longer notice period you accept, the higher the interest rate will be.
You may not have money readily available to invest but by making small changes to your spending habits, buying less expensive gifts over this season and setting an investment goal, you may well surprise yourself!
Why not open your investment account now?