African Bank Fixed Deposits Review 2021

Posted on Mar 24, 2021 by Staff Writer

Rateweb | South Africa

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Fixed Deposit investments are a great way to invest in the short, medium, and long term. African Bank has mastered the fixed deposit savings like no other bank in South Africa. As of 2021 African Bank holds the best-fixed deposit rate in South Africa beating every other bank offering a fixed deposit account. 

Fixed deposit accounts from African Bank vary depending on your savings strategy. Clients can invest starting from 3 months to as long as 60 months with interest withdrawals being optional. 

Before investing or locking down your money into a fixed deposit account at African Bank, concepts like NACM, NACA, and simple interest need to be understood. These technical acronyms and/or names play a crucial role in one’s investment. 

NACA or Nominal Annual Compounded Annually refers to the interest earned over a one-year period, assuming that all interest earned monthly is reinvested into the fixed deposit account on a monthly basis. NACM or Nominal Annual Compounded Monthly is interest earned over one month, whereas, simple interest is a calculation of interest on the principal investment. 

African Bank 60 Months Fixed Deposit Account 

Payout TypeFixed Deposit Interest Rate
Monthly interest payout8.87%
Semi-annual interest payout9.03%
Annual interest payout9.23%
Payout at expiry11.11%
African Bank 60 Months Fixed Deposit Account

The African Bank 60 months fixed deposit account offers the highest interest rate in South Africa, be NACM or effective interest rate. Depending on your savings needs you can choose to pocket your earned interest on a month-to-month basis or simply let it compound. 

By letting your savings stay untouched for 60 consecutive months, you get 11.11% effective interest for your investment. Therefore, if you have invested R1000.00 at the beginning of the term you will make R555.61  as interest earned, increasing your initial investment by more than half. 

If you plan to withdraw your interest earnings every month end then you will have a 8.87% effective interest rate. With the same type of investment, you get to earn R7.39 interest per month and R443.40 for the 60 months investment period. 

The difference in the two scenarios is the compounding effect on the second investment. For the monthly interest withdrawal option, simple interest is used to calculate interest every month and compound interest is used for the withdrawal at maturity option. 

Therefore, it is always wise to keep your investment locked down for the entire investment period to maximize interest earnings for the period. 

African Bank 36 Months Fixed Deposit Account 

PayoutFixed Deposit Interest Rate
Monthly interest payout7.02%
Semi-annual interest payout7.12%
Annual interest payout7.25%
Payout at expiry7.78%
African Bank 36 Months Fixed Deposit Account

The 36 months fixed deposit account requires a minimum principal investment of R500.00. Like the 60 months fixed deposit account, the 36 months fixed deposit account offers the highest interest rate in its category in South Africa. 

The account has an effective interest (NACA) rate of 7.78% which is the highest for a 36 months fixed deposit account in South Africa. The NACM on the account is 7.02% which is very high as compared to the interest rates offered by competitors. 

African Bank 24 Months Fixed Deposit Account 

Payout TypeFixed Deposit Interest
Monthly interest payout6.55%
Semi-annual interest payout6.64%
Annual interest payout6.75%
Payout at expiry6.97%
African Bank 24 Months Fixed Deposit Account 

The account doesn’t offer rates as high as the 36 months fixed deposit account, however, the account offers over-the-top rates for a 24 months fixed deposit account. African Bank’s 24 months fixed deposit account requires a minimum of R500.00 to get started. 

The NACA or the effective interest rate is 6.97% whereas the NACM interest rate is 6.55%. For a R1000.00 investment, you get to earn R5.46 interest  NACM with total interest of R131.04. The payout on expiry earns R139.56 for a R1000.00 investment. This shows that payment at expiry yields more favourable results with high interest earned. 

African Bank 12 months Fixed Deposit Account 

Payout TypeFixed Deposit Interest Rate
Monthly interest payout5.85%
Semi-annual interest payout5.92%
Annual interest payout6%
Payout at expiry6%
African Bank 12 months Fixed Deposit Account

The 12 months fixed deposit account from African Bank offers a payout percentage of 6% with a semi-annual payout at 5.92%. These percentages are very high when compared to offers from other banks. This option is perfect for those that want to invest for medium-term. 

African Bank 6 Months Fixed Deposit Account

Payout FeeFee
Monthly interest payout5.13%
Semi-annual interest payout5.18%
Annual interest payout5.25%
Payout at expiry5.18%

 The African Bank 6 months Fixed deposit account has one of the best interest rate offers in this category. The account has an interest of 5.18% on the expiry date.

African Bank 3 Months Fixed Deposit Account

Payout TypeFixed Deposit Interest Rate
Monthly interest payout4.65%
Semi-annual interest payout4.69%
Annual interest payout4.75%
Payout at expiry4.66%
African Bank 3 Months Fixed Deposit Account

Three months is a very short space of time and having to earn interest for such a short period can be a daunting task. However, a fixed deposit account from African Bank can give you returns that are high for investing for 3 months. The African Bank 3 months Fixed Deposit Account can earn you interest of 4.66% on expiry. 

How to apply for the African Bank Fixed Deposit Account

  1. Have a valid South African ID book or Smart card. 
  2. Have a minimum deposit of R500.00 or more to activate your fixed deposit account. 
  3. Proof a residence that is not older than 3 months. 

Conclusion 

African Bank offers multiple fixed deposit accounts that one can choose from, with competitive interest rates that make saving worthwhile. Collecting interest at payout is always favourable as there will be more money to collect at that point. Therefore, aim to allow the compounding effect to work so that you can gain more interest on your investment.

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