Making that fixed interest.

mr_norris said:
The limit is what you can contribute. Whether you deposit 100k, or R10, you will still get to a stage where it earns 9%.
Click to expand...

Nope .... Read about the 3 profiles first please.

Doesnt help you put R100 000 in, and you are on "Just Met" profile

Profile limits are determined how you bank with Tyme.

Just Met - Max R20 000
Getting to know you - R50 000
Good friends with R500 000 (with goalsaves maxed at R100k)

If anyone interested in Tyme, I would say open an account online, open 5 goalsaves with R1 in each, and wait (let the interest rate climb)
 
zerocool2009 said:
Nope .... Read about the 3 profiles first please.

Doesnt help you put R100 000 in, and you are on "Just Met" profile

Profile limits are determined how you bank with Tyme.

Just Met - Max R20 000
Getting to know you - R50 000
Good friends with R500 000 (with goalsaves maxed at R100k)

If anyone interested in Tyme, I would say open an account online, open 5 goalsaves with R1 in each, and wait (let the interest rate climb)
Click to expand...

He was asking about the contribution limits and the interest you can earn. You can earn 9% no matter which profile you are on. I stand by what I said.
 
mr_norris said:
He was asking about the contribution limits and the interest you can earn. You can earn 9% no matter which profile you are on. I stand by what I said.
Click to expand...

You said this :
"The limit is what you can contribute. Whether you deposit 100k, or R10, you will still get to a stage where it earns 9%. "

Ok, if you move R40 000 into your R20 000 profile, the EFT will fail.

I am trying to pin point out, I can contribute R1 000 000 and the EFT will fail. Contribution is limited to your profile

And you are right related to the rate of 9%
 
Not sure if mentioned but it's worth it starting up a tax free savings account with R33000 deposit each year. Most places offer interest of around 7% p.a which is around 10%+ p.a. before tax. It might not make a difference now but you can add R33k per year to the account (up to R500k of deposits) and all interest will be tax free. So over the years the benefit will become much more apparent as your other savings vehicles grow.
 
African Bank is advertising their fixed deposit rates as the best in the country. They quote a 13.33% for a 5 year fixed deposit. Is this true? How does this compare to other banks?? ... Answer at bottom!
726572



Caution!!! African Bank's 13.33% is simple interest! This is confusing & misleading!! In fact Absa played the same marketing spiel last year & got scolded for it. Eventually, Absa took their adverts down.

African Bank is playing a slightly better game (ito disclosure) & at least quoting additional interest types. You can see it in the table below. Apart from Interest payout at expiry (aka Simple interest); they also have Monthly Interest payout, annual interest payout, semi-annual interest payout)
726576

So top marks on disclosure. But Wow talk about confusing!!! Which interest type should I use to compare to other banks website?

In short, you should be using nominal rates or effective annual rates to compare fixed deposit rates between banks. Maya on Money posted a great article 'Understanding your interest rate' in August. See here.

726590


Ok. Now lets see if we can compare different fixed deposit rates across different banks using effective annual interst rate. Unfortunately, you run into difficulties quickly, as you will often need to read some fine-print to understand what interest the bank is showing on their website (nominal, effective or simple is typically used).

A great source for comparing effective rates is www.ratecompare.co.za.

How do African Bank's fixed deposit rates compare to other banks?

726578
Source: www.ratecompare.co.za

The website also features best rates for 3,6,12, 24
 
fire2029 said:
African Bank is advertising their fixed deposit rates as the best in the country. They quote a 13.33% for a 5 year fixed deposit. Is this true? How does this compare to other banks?? ... Answer at bottom!
View attachment 726572



Caution!!! African Bank's 13.33% is simple interest! This is confusing & misleading!! In fact Absa played the same marketing spiel last year & got scolded for it. Eventually, Absa took their adverts down.

African Bank is playing a slightly better game (ito disclosure) & at least quoting additional interest types. You can see it in the table below. Apart from Interest payout at expiry (aka Simple interest); they also have Monthly Interest payout, annual interest payout, semi-annual interest payout)
View attachment 726576

So top marks on disclosure. But Wow talk about confusing!!! Which interest type should I use to compare to other banks website?

In short, you should be using nominal rates or effective annual rates to compare fixed deposit rates between banks. Maya on Money posted a great article 'Understanding your interest rate' in August. See here.

View attachment 726590


Ok. Now lets see if we can compare different fixed deposit rates across different banks using effective annual interst rate. Unfortunately, you run into difficulties quickly, as you will often need to read some fine-print to understand what interest the bank is showing on their website (nominal, effective or simple is typically used).

A great source for comparing effective rates is www.ratecompare.co.za.

How do African Bank's fixed deposit rates compare to other banks?

View attachment 726578
Source: www.ratecompare.co.za

The website also features best rates for 3,6,12, 24
Click to expand...

Where is Tyme bank ? They are second in the list, with no fixed period, but it takes 3 months to get to 9% (per year)
 
zerocool2009 said:
Where is Tyme bank ? They are second in the list, with no fixed period, but it takes 3 months to get to 9% (per year)
Click to expand...

Tymebank does offer very attractive interest rates for their goal save offering. The website RateCompare.co.za only compares fixed deposits, ie where you are guaranteed a set percentage after a specific term. Tymebank's offering is not a pure fixed deposit offering. It is unclear whether Tyme is able to adjust rates e.g. after a period of time. So one cannot do a like-for-like comparison.

Example: lets say you want to invest for a fixed term of 12 months. What is the rate for Tymebank? Is that rate fixed, or are they able to change it once their promotions change.
 
newby_investor said:
If your timescale really is years, then probably an equity-based unit trust or something. Fixed interest products don't really get you anywhere IMO. The only ones with decent interest rates are African Bank and Tyme, which (as has been pointed out) don't really carry a large level of trust. The big four banks you're going to have to content yourself with a measly 7% or so interest rate.

What I'd do:
if I had a bond, I'd stick it straight in there and forget about it.
if I didn't have a bond but was planning to buy a property in <5 years, probably a fixed-deposit at my bank of choice,
if I had a paid off house already, probably an MSCI World ETF (or a mixture of them) on EasyEquities.

(Alternatively, ABSA's 60-month fixed deposit at about 10% IIRC isn't the worst possible option. But it does lock your money up for 5 years.)
Click to expand...

Hi - agree that for longer time horizons (10+ years) - more risky asset classes such as equities is the place to put your money.

Regarding your Absa 60 month fixed deposit comment...where do you see this offering? Can't find it anywhere on their website?
 
Thor said:
RSA retail bonds are very low risk too.
Click to expand...

Yes. SA Retail bonds are a great low risk way to put your money away for a set time.

They are super low-risk as they are guaranteed by government & arguably safer than a bank. Despite their lower risk, the SA retail bond interest rate offerings compare very favourably to banks' fixed deposit offerings. In fact, on a 2 year term, SA retail bonds offer better fixed rates than most banks (excluding African bank). They even beat Capitec's offering...

726750
Source: www.ratecompare.co.za


Now the question is ... who do you trust more ... the government or the bank?
 
fire2029 said:
Hi - agree that for longer time horizons (10+ years) - more risky asset classes such as equities is the place to put your money.

Regarding your Absa 60 month fixed deposit comment...where do you see this offering? Can't find it anywhere on their website?
Click to expand...
There was some noise about it a while ago in the media. I forget exactly now.
 
zerocool2009 said:
In short, it wasnt interest on interest. Wish people would read and understand how a product work before making waves !
Click to expand...

I think people are right to voice concerns over some of the banks' marketing gimmicks. In Absa's case, they did not adequately disclose the fact that their advertised rates were 'simple interest' & thus they gave in after a while and took their ads down. It's crazy that there is still no formal standard for disclosing fixed deposit rates. It should be nominal or effective annual rates. But some banks (Absa! still a culprit amongst others!), still make it mighty confusing for individuals to compare fixed deposit rates!
 
fire2029 said:
I think people are right to voice concerns over some of the banks' marketing gimmicks. In Absa's case, they did not adequately disclose the fact that their advertised rates were 'simple interest' & thus they gave in after a while and took their ads down. It's crazy that there is still no formal standard for disclosing fixed deposit rates. It should be nominal or effective annual rates. But some banks (Absa! still a culprit amongst others!), still make it mighty confusing for individuals to compare fixed deposit rates!
Click to expand...

I recall the T's and C's very small on the absa add (but people always just jump for the big wording).

The same with African Bank (awesome 13.33%) ... but read what it says actually and understand the product
 
fire2029 said:
I think people are right to voice concerns over some of the banks' marketing gimmicks. In Absa's case, they did not adequately disclose the fact that their advertised rates were 'simple interest' & thus they gave in after a while and took their ads down. It's crazy that there is still no formal standard for disclosing fixed deposit rates. It should be nominal or effective annual rates. But some banks (Absa! still a culprit amongst others!), still make it mighty confusing for individuals to compare fixed deposit rates!
Click to expand...

It's not in the interest of the financial institutions to do this. They try to make it confusing so that a consumer can't easily compare their product to that of their competitors. Same thing with medical aid plans, etc. You can't really compare them because the benefits are all so different.

zerocool2009 said:
I recall the T's and C's very small on the absa add (but people always just jump for the big wording).

The same with African Bank (awesome 13.33%) ... but read what it says actually and understand the product
Click to expand...

This x 1000.
 
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