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Best savings accounts in South Africa for 2022

Published by
Parddon Khumalo

There is a lot to benefit from a savings account other than merely earning interest from the savings.

Best savings account in South Africa for 2022

Savings AccountMinimum DepositInterest Rate
ABSA TruSaveR50.004%
African Bank MyWorld AccountR0.005.5%
Capitec Fixed Term SavingsR10000.008.50%
FNB Savings AccountR10000.003.8%
Investec Prime SaverR100000.00Prime Linked
Best savings account in South Africa for 2022

Saving money will help you build up funds to cover both planned and unexpected expenses in the future. Whether you are saving towards a set goal or you are saving for a rainy day, there are three savings needs and requirements to consider;

  • The interest rate you are offered (is it a fixed or variable rate)
  • The pattern of deposits to your savings account
  • Easy access savings accounts

Prior to listing out the best savings accounts in South Africa, we want to fill you with parameters to consider in choosing an account that best suits you.

The interest rate offered

Financial institutions always charge you interest when you take out a loan, similarly, you also earn interest on the money you save.

You can be offered a fixed or variable interest rate; the best choice depends on your circumstances/ preferences.

Variable interest rate

Because it is controlled by the repo rate, a variable interest rate is subject to alter over time (set by the South African Reserve Bank). When you open a savings account with a variable interest rate, you earn more when the country’s interest rates rise and less when they fall. This means that interest on savings accounts is currently low, and interest on loans is likewise low. As a result, if you have a savings account with a variable interest rate, you will receive more if the rate rises and less if it falls.

Fixed interest rate

Because it is unaffected by the repo rate, a fixed interest rate does not fluctuate at any point during your savings. The interest rate you are provided at the time you sign the savings agreement does not change. When the repo rate rises, your earnings do not rise proportionately, and when the repo rate falls, your earnings do not fall proportionately. A fixed interest rate is less hazardous, even if you might miss out if the repo rate rises. Compounding interest is a feature of most savings accounts that allows you to earn more interest over time. Earnings are accumulated on the original amount you saved plus the interest previously accumulated via compound interest. Because simple interest simply accumulates money on the original amount saved, it is not as beneficial as compound interest.

Deposits to your savings account

After you’ve opened a savings account, the method you use to deposit funds into it is entirely dependent on your circumstances. Regular deposits or one-time lump sum deposits are the two ways to fill your savings account.

Regular deposits

The majority of consumers prefer to fund their savings accounts via monthly debit orders. This is a manageable alternative because you don’t require any additional funds to begin saving.

Once off deposits

This is the ideal option because you may put a large sum of money into your savings account and start earning interest right away. Rather than depositing tiny amounts on a monthly basis, which will take a long time to increase. Most South Africans, however, choose recurring installments since they cannot afford to invest significant sums of money all at once.

Easy access savings accounts

These are interest-bearing accounts that allow you to withdraw funds anytime you need them. If you’re putting money aside for a rainy day, you might want to consider a savings account that allows you to withdraw funds as soon as feasible. Rainy days happen without warning, and in order to deal with some of them, you’ll need cash as soon as feasible. If your assets are intended for rainy days, a savings account that allows withdrawals at any time may be a suitable choice.

Shortlisted 5 best savings accounts in South Africa

The South African banking sector has very competitive savings account products. In this piece, we will just discuss the top five items that we discovered during our investigation.

ABSA Bank

Account type: TruSave

Minimum deposit: R50

Interest rate: variable interest rate, determined by market condition and the bank’s prime rate

The ABSA TruSave savings account is an easy way to start saving, with a minimum of R50 you can start saving up some money.

From this account, each month you get:

  • 2 free ABSA ATM cash deposits
  • 2 free ABSA ATM mini statements
  • Two free balance inquiries

There are also 2 free cash withdrawals every year.

The interest is calculated daily on your investment balance and paid to you every month.

To continue earning interest your account should have the minimum balance, meaning you will not earn interest if your account balance is less than R50.

Eligibility:             

  • Your South African ID
  • Proof of residence (not older than three months)

African Bank

Account type: MyWorld Savings Pocket

Minimum deposit: R0

Interest rate: 5.5% per annum

The African Bank MyWorld Account comes with the savings pocket and the power pocket.

Your MyWorld account has its own account number (the primary account) then the savings pocket gets its own separate account with a unique account number.

With the MyWorld savings pocket you enjoy immediate access to your funds. It is also an ideal way to save money as a group because up to 10 members can be added to view the account.

Eligibility:

  • Your South African ID
  • Proof of residence (not older than three months)

Capitec Bank

Account type: Fixed-term Savings Plan

Minimum deposit: R10 000

Interest rate: up to 8.50% nominal interest rate

The Capitec Fixed term savings plan has 2 options, the single deposit option and multiple deposits.

In our summary, we introduce you to the single deposit option.

How it works:

  • From 6 to 60 months savings period.
  • Withdrawal is made on the maturity date
  • The agreed Interest rate will be fixed for the full term
  • Deposit amounts from R10 000 to R20 million

The Capitec Fixed Term savings account is ideal if you have a lump sum you want to grow toward a set goal.

FNB Bank

Account type: FNB Savings Account

Minimum deposit: R10 000

Interest rate: 3.8% based on your balances (the higher the balance the higher the interest)

The FNB Savings Account is available to exclusively cheque account holders. It is very flexible in the number of deposits and withdrawals you can make.

How it works:     

  • you get immediate access to your money whenever the need arises
  • can access your savings account through FNB online banking services
  • The FNB Bank Your Change allows you to save money as you spend. You can save R2, R5, R10, R20 or R50 into your savings account every time you swipe your FNB credit card. This feature rounds up every transactional account card purchase value up to the nearest rand and transfers the difference into your savings account.
  • There are no monthly fees

With this account you are guaranteed of your original deposit and the quoted returns are 100% sure.

Investec

Account type: Investec Prime Saver

Minimum deposit: R100 000

Interest rate: Prime-Linked Interest Rate

PrimeSaver is the most popular savings account offered by Investec. There are no monthly fees needed to maintain the account and you have full access to all of your savings (in 24 – 48 hours).

Investec customers also benefit from online banking access and dedicated customer service.

Conclusion

From the savings accounts, provided by the different Banks listed above, you can choose the one that suits you and the one you perceive as the most convenient.

According to you, which one would be the most suitable for savings account you can signup for?

Parddon Khumalo

Published by
Parddon Khumalo