Short term Investment options for different budgets

20/02/2019

The best time to start investing is now. Whether it’s R100, R500 or more each month, the money you invest today will give you financial freedom in your future. There are several wealth building short term investment options available in South Africa, but don’t let the complexity put you off. You don’t have to be an expert to invest your money. What you need is the commitment to get started.

Deal with debt first

One of the first things to do before you start investing is to pay off your short-term debt. What you pay in interest rates on debt is usually very high, so think of all the money you could save if you cleared your debt. Credit card interest rates are also usually very high, but you could make this work to your advantage by using your credit card as a savings vehicle. Read more: How to use your credit card wisely

 Make compound interest work for you

By investing as early as possible, you can enjoy the benefits of compound interest. This quote from Benjamin Franklin will help you understand compound interest: “Money makes money. And the money that makes money, makes more money.”

Let’s say you invest R1000 this year and it earns a 10% return. That means at the end of the year, you’re left with R1100. Even if you left that amount in your account and couldn’t invest any further money the next year, the figure would still grow. Because you (wisely) left your money in your account, you would still earn your 10% return and that would mean an extra R110 in your bank account. Your money earned money.

The longer you invest your money in a particular investment vehicle, the greater your compound interest gains will be.

Understand your options 

When it comes to investments in South Africa, there are so many options. There are investment solutions from banks, retirement funds, unit trusts, stock market investments, Stokvels, shares, Kruger Rands, Bitcoin, property and so much more. You could even “invest” by putting extra money into your home loan – the amount you save on interest could be significant.

It’s important to diversify your portfolio and not to put all your money in one investment or one institution. Look for the best returns at as low a risk as possible. The most important piece of advice, however, is to seek the advice of a trusted financial advisor. Avoid “too good to be true” investments and make sure your investments are regulated by the Financial Services Board.

African Bank short-term investment and long-term investment options

African Bank’s various investment options cater for different budgets. Whether you’re a beginner investor with a small budget or a seasoned investor with years of savings behind you, we have a solution for you.

  • African Bank Tax Free Investment: South Africans can invest up to R33000 each year in a Tax Free savings account without paying income tax, dividends tax or capital gains tax. With a minimum deposit of R100, you can make additional deposits from as little as R100 into this account each month. You have the option to access your funds (partially or fully) during your 12-month anniversary month. Click here to start saving.
  • African Bank Access Accumulator: This 24-month investment vehicle is unique to the South African market, allowing you to access your money in a 24-hour period with no penalties or no notice period. With this investment option, you can deposit one lump-sum at the beginning of your investment and interest pay out will take place on withdrawal or on expiry. Start investing in this account for as little as R500 per month. Click here to find out more.
  • African Bank Fixed Deposit: Earn South Africa’s best interest rate* with just R500. Your interest rate will not change for the duration of your investment. Choose whether or not you want your interest paid out monthly, every six months, every 12 months or on maturity. (Don’t forget about compound interest – if you leave your money rather than taking a monthly payment, you earn more money in the long run!). Click here to open your account and invest your lump sum.
  • African Bank Notice Deposit: If you want above-market returns with access to your funds at short notice, this account is for you. Open this account with just R500 and make deposits as small as R100 each month. Grow your money as you go! Choose to have your interest rate paid out monthly or re-invested into your notice deposit account. Again, don’t forget to make that compound interest work for you! Access your funds with a seven, 32 day or 90 day notice period. Click here to get as little as R100 working for you.

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About African Bank

Our mission is to be a successful Retail Bank offering a wide range of products and services to the consumers of South Africa. The people who work for African Bank represent the diverse population of South Africa; therefore we are a reflection of you, of all South Africans. We seek to provide value - more than our consumers expect of us. We promise to live our purpose 'humanity through banking' in all that we do and we are confident that we can, because 'We are You'.