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 Account | Minimum Deposit | Interest Rate |
|---|---|---|
| ABSA TruSave | R50.00 | 4% |
| African Bank MyWorld Account | R0.00 | 5.5% |
| Capitec Fixed Term Savings | R10000.00 | 8.50% |
| FNB Savings Account | R10000.00 | 3.8% |
| Investec Prime Saver | R100000.00 | Prime Linked |
Saving money will assist you in accumulating funds to cover both anticipated and unanticipated 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 offered to you (is it fixed or variable?)
- The pattern of deposits to your savings account
- Accounts with easy access to funds
Prior to listing the best savings accounts in South Africa, we’d like to provide you with a list of criteria to consider when selecting the account that’s right for 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
A variable interest rate is subject to change over time (set by the South African Reserve Bank) because it is controlled by the repo rate. You earn more when the country’s interest rates rise and less when they fall when you open a savings account with a variable interest rate. This means that interest on savings accounts is currently low, and interest on loans is likewise low. As a result, if you have a variable interest rate savings account, you will earn more if the rate rises and less if the rate 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’re given when you sign the savings agreement stays the same. 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 safer, even if you risk losing money 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?
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