Interest Advice

[KingRamses]

Morning,

Clueless in the financial world, any advice will be welcome.

My grandmother recently sold her flat, giving her R 400 000 cash in hand. With a very small pension she obviously has to live off this money going forward.

It can't be invested for a fixed term, should she fall ill etc. the money will be needed. What are the best options, and best interest rate with money remaining available?

Had a look at FNB, for instance a 7day Notice deposit account, only generates 2.3% interest.

Any other options?

 

[AlmightyBender]

A possible option is to use it to purchase an annuity, which should bring in a couple hundred rand per month, but at least it can be paid out for the rest of her life and can keep pace with inflation.

 

[Topdoggdbn]

Not the best option
Nedbank offering 4.5% no fees 24 hour notice.

 

[Chevron]

Money Market account?

 

[Purply]

Absa also offers Depositor Plus accounts @ 5.1% with notice period 24 hours if I'm not mistaken.

PS.... afiak the Nedbank one comes in @ 5.2% and goes up till 5.6% depending on the amount invested.

 

[znh]

Open an account with Coronation, make a voluntary investment into the Balanced plus fund... Avoid all "financial advisors" and choose direct investment

Disclaimer --- this ^^^ works for me

Anything earning below 8% is esentially losing money due to the rate of inflation

 

[^^vampire^^]

Open an account with Coronation, make a voluntary investment into the Balanced plus fund... Avoid all "financial advisors" and choose direct investment

Disclaimer --- this ^^^ works for me

Anything earning below 8% is esentially losing money due to the rate of inflation

This. Official inflation is 5.7-6.0 so anything less than that is losing you money each year.
However real inflation is a lot higher (food prices etc went up a hell of a lot more than 6.0% over the last year).

 

[Purply]

I think you guys are missing the plot completely, OP specifically asked for "no fixed term"

 

[^^vampire^^]

I think you guys are missing the plot completely, OP specifically asked for "no fixed term"

In that case, the OP can go to the strip club and throw away his money - just as effective

 

[nevadayz]

In that case, the OP can go to the strip club and throw away his money - just as effective

this.

 

[VG008]

FNB 7 Day is 5.3% - FNB site takes you to the wrong page.

Anyway, You won't need all 400K at once; split the cash into several buckets (watch for fees though)

Instance access - Lower Interest
Notice deposit - Medium Interest
Fixed Deposit - A bit higher interest, but doesn't beat inflation
Money Market

Some banks offer a higher interest rate for senior persons, so look into this.

Remember, this is not an investment, you are going to lose a bit compared to inflation.
What do you mean by: " live off this money going forward"? Will she be using it for monthly expenses? If so, how much does she need per month?

 

[undesign]

FNB 7 Day is 5.3% - FNB site takes you to the wrong page.

Anyway, You won't need all 400K at once; split the cash into several buckets (watch for fees though)

Instance access - Lower Interest
Notice deposit - Medium Interest
Fixed Deposit - A bit higher interest, but doesn't beat inflation
Money Market

Some banks offer a higher interest rate for senior persons, so look into this.

Remember, this is not an investment, you are going to lose a bit compared to inflation.
What do you mean by: " live off this money going forward"? Will she be using it for monthly expenses? If so, how much does she need per month?

^this^

 

[vash87]

Open an account with Coronation, make a voluntary investment into the Balanced plus fund... Avoid all "financial advisors" and choose direct investment

Disclaimer --- this ^^^ works for me

Anything earning below 8% is esentially losing money due to the rate of inflation

Investment advice is not one size fits all. In my opinion the OP is better off speaking to a qualified "financial advisor" than a bunch of anonymous forum members.. that is if he'd like the option of legal recourse in the case of bad advice.

Speaking to an adviser doesn't tie you to them for life. Spent some time finding one who's actually worth their salt.

 

[Shayd]

Open an account with Coronation, make a voluntary investment into the Balanced plus fund... Avoid all "financial advisors" and choose direct investment

Disclaimer --- this ^^^ works for me

Anything earning below 8% is esentially losing money due to the rate of inflation

Yeah don't trust and expert who does this for a living. Trust some anonymous guys on the internet who are completely unaccountable!

Did you ready the part about him not being able to lock it away and might need it in an emergency? So what happens when the market gets re rated and the fund drops 25% and then granny needs her money now?

My recommendation to the op is speak to a professional. You need detailed advice not a random thumb suck.

 

[starring]

Open an account with Coronation, make a voluntary investment into the Balanced plus fund... Avoid all "financial advisors" and choose direct investment

Disclaimer --- this ^^^ works for me

Anything earning below 8% is esentially losing money due to the rate of inflation

Looking at something like this as well...normally how much do you at least have to invest with Coronation?

 

[TimWarren12]

I think VG008 is right you guys should split your money and invest in different funds so that risk is minimised