Choosing a banking account for variable savings

[s0lar]

I am with FNB. I am looking for an account that I will adding to every month separate to my transactional account, but intended to withdraw the full amount every six months. Final balance should be around R500-R600k after 6 months should that factor at all.

Any recommendations for what kind of account I should get? Pro's / con's? I a considering a "savings pocket" account but am wondering if there is anything better out there. Preferably FNB but am happy to look at others.

 

[chrisc]

Have a look at Tyme Bank
They have all sorts of savings schemes. A bit convoluted, but seems to have what you want

 

[W@P]

Have a look at Tyme Bank
They have all sorts of savings schemes. A bit convoluted, but seems to have what you want

Yeah and you can open the account online and then just go to the kiosk inside pick n pay to get the card and verify yourself to increase limits.

 

[s0lar]

Wow, Tyme Bank interest is great compared to FNB over 90+ days.

 

[deweyzeph]

I am with FNB. I am looking for an account that I will adding to every month separate to my transactional account, but intended to withdraw the full amount every six months. Final balance should be around R500-R600k after 6 months should that factor at all.

Any recommendations for what kind of account I should get? Pro's / con's? I a considering a "savings pocket" account but am wondering if there is anything better out there. Preferably FNB but am happy to look at others.

Open up an offshore bank account and stick your cash there. Keep as much of your money offshore as possible.

 

[3WA]

Wow, Tyme Bank interest is great compared to FNB over 90+ days.

Only problem is you can only save R100k maximum at TymeBank so you have to find something else for the rest. Perhaps a 32-day notice account. African Bank has decent rates on those.

 

[s0lar]

Only problem is you can only save R100k maximum at TymeBank so you have to find something else for the rest. Perhaps a 32-day notice account. African Bank has decent rates on those.

Damn it, just saw that.

 

[3WA]

Damn it, just saw that.

The other issue is it takes three months for your TymeBank saving account to get to the maximum interest rate, so for the first three months you'll have rates comparable to other banks.

Still worth creating them, because once they’re older than three months, it's the best interest rate.

 

[s0lar]

Open up an offshore bank account and stick your cash there. Keep as much of your money offshore as possible.

What is the benefit of offshore? I am a bit financially illiterate.

These amounts are coming in as USD and I convert to ZAR at FNB at the moment when currently having it deposited into my cheque account if that factors any.

 

[backstreetboy]

You're not going to find anything much for such a short period of time.

 

[Speedster]

What is the benefit of offshore? I am a bit financially illiterate.

These amounts are coming in as USD and I convert to ZAR at FNB at the moment when currently having it deposited into my cheque account if that factors any.

Benefit is a hedge against rand weakness. You can receive the USD and bring it in bit by bit as needed. I use Wise: https://wise.com/invite/a/phillipb258

 

[N@t3]

Open up an offshore bank account and stick your cash there. Keep as much of your money offshore as possible.

Hi recommendations for an offshore bank account and requirements.

 

[deweyzeph]

What is the benefit of offshore? I am a bit financially illiterate.

These amounts are coming in as USD and I convert to ZAR at FNB at the moment when currently having it deposited into my cheque account if that factors any.

1) Protect your capital against the depreciation of the rand
2) Protect your capital from expropriation by the government

 

[deweyzeph]

Benefit is a hedge against rand weakness. You can receive the USD and bring it in bit by bit as needed. I use Wise: https://wise.com/invite/a/phillipb258

The problem is that exchange control regulations require you to repatriate any foreign currency earnings back to South Africa within 31 days of receiving them. Once you repatriate them you are free to then send those USD back overseas as long as they fall within your annual SDA. It's crazy, I know, but those are the rules. You cannot just keep your foreign earnings offshore otherwise you are in contravention of exchange control regulations. Offshore earnings have to be brought onshore first, and only then can you send them offshore again.

 

[deweyzeph]

Hi recommendations for an offshore bank account and requirements.

I use FNB Channel Islands:

Home

www.fnbci.co.uk

As long as you keep your balance above 2500GBP you don't pay any fees.

 

[LostGoat]

1) Protect your capital against the depreciation of the rand
2) Protect your capital from expropriation by the government

He is only working in 6 month intervals before withdrawing. Unless he plans to spend it on something in a foreign country he is losing 2-3% of his capital to send it out and bring it back.
1) The rand will depreciate in the long term but in the short term due to losing 2-3% in fees there is a high chance he will come out worse off especially if you factor in the increased interest rate he will get in SA. The chance of him being better especially with the money deposited in the 5th month seems very low.
2) Sure there are valid concerns around government policies but you also have to weigh up the possibility of those happening within a 6 month interval.

Also if withdrawing every 6 months I assume they require the money for something specific and in that case I would not recommend exposing yourself to the exchange rate risk. Without context does seem weird though that you would require large sums every 6 months, makes me wonder if holding cash is the correct choice.

 

[deweyzeph]

He is only working in 6 month intervals before withdrawing. Unless he plans to spend it on something in a foreign country he is losing 2-3% of his capital to send it out and bring it back.
1) The rand will depreciate in the long term but in the short term due to losing 2-3% in fees there is a high chance he will come out worse off especially if you factor in the increased interest rate he will get in SA. The chance of him being better especially with the money deposited in the 5th month seems very low.
2) Sure there are valid concerns around government policies but you also have to weigh up the possibility of those happening within a 6 month interval.

Also if withdrawing every 6 months I assume they require the money for something specific and in that case I would not recommend exposing yourself to the exchange rate risk. Without context does seem weird though that you would require large sums every 6 months, makes me wonder if holding cash is the correct choice.

Those are valid points. In my case moving money offshore is a long-term strategy and I have no intention of bringing that money back into South Africa short-term unless there's some sort of emergency.

As far as fees are concerned there are ways to mitigate it. For example, I use Shyft to move money offshore which incurs a fixed cost of $14 per transfer regardless of the amount transferred, which works out pretty cheap if you're moving large amounts over. If you have a debit card linked to your offshore account then you can use that to effectively "move" money onshore for once-off purchases which works out far cheaper than a SWIFT transfer. But obviously your biggest expense could be moving large amounts back onshore through the SWIFT system.