SA's Best Fixed Deposit Rates

[fire2029]

Why not add all this in an google spreadsheet so people can clone it and add their estimated amounts to it? Can add rules like tymebank 100k so it caps it and says you should use xyz instead for the rest?

Cool idea.

 

[Forum Reader]

True ! If you are looking at those figures (SARS will be waiting also).

My view, just get max R20K a year for free

SARS will take their share no matter what you do with your cash. If you invest in equity you also pay capital gains tax of 40% (after R40k tax free portion). You don't get the R40k tax free every year too, you only get it once, in the year when you decide to sell. One benefit of this though is the tax is delayed until you cash out so you can generate returns on returns. However you also have to hope that the market keeps going up or that you didn't invest near a 5 year high etc.

The 40% tax is usually a fair bit higher than the income tax rate which is paid on interest earned. Most people have about a 30%-35% income tax rate.

 

[fire2029]

True ! If you are looking at those figures (SARS will be waiting also).

My view, just get max R20K a year for free

Yeah - unfortunately we cannot run from Mr Tax Man. As highlighted by zerocool, you will have to have quite a bit of moolah to surpass the interest exemptions. Here are some helpful numbers:

For the 2020 tax year, the following interest exemptions apply:

Age	Exemption​
Individuals under 65	R 23 800 per annum​
Individuals 65 and over	R 34 500 per annum​

T
hese exemption levels have remained unchanged for a number of years.

To surpass these exemption levels, you will have to invest +/- R 300 000 (*) - if younger than 65 - or R430 000 (*) - if 65 or older - to pay any tax on your interest. Remember, even in that case only the income above the interest exemption is liable for tax.

Example Lets say you invested R500 000 in a fixed deposit at a fixed rate of 8%. The total interest earned over the year was R 40 000.

If you are under 65 you qualify for a R23 800 exemption. So only R16 200 would be subject to income tax. If you are over 65 only R 5 500 would be deemed taxable at your marginal income tax rate.

 

[Jehosefat]

SARS will take their share no matter what you do with your cash. If you invest in equity you also pay capital gains tax of 40% (after R40k tax free portion). You don't get the R40k tax free every year too, you only get it once, in the year when you decide to sell. One benefit of this though is the tax is delayed until you cash out so you can generate returns on returns. However you also have to hope that the market keeps going up or that you didn't invest near a 5 year high etc.

The 40% tax is usually a fair bit higher than the income tax rate which is paid on interest earned. Most people have about a 30%-35% income tax rate.

Completely wrong on most counts.

1. The R40,000 exclusion is an annual exclusion (with the caveat that the disposal must occur during the year for it to be applicable, it's not cumulative over the life of the investment)
2. The Inclusion Rate (not the tax rate) is 40% which means you include 40% of your capital gains (after removing the R40,000 exemption) in your annual income which you then pay tax on at whatever your income tax rate works out to
3. This means that the actual capital gains tax rate is a max of 18% which is significantly lower than income tax maximum rate of 45%
4. Interest earned is subject to income tax not capital gains tax and has it's own, separate annual exemption of R23,800

 

[Antelope]

From the beginning of the year, Capitec also doesn't require proof of address to open an account.

Who is behind Tyme? Are they known entity? Also, apparently, they don't need proof of residence - how does that work - I thought that was mandatory as per some banking regulation/law?

p.s. I mean apart from what is mentioned on the site, do we have any background? https://www.tymebank.co.za/leadership-team/

 

[Sideshow Bob]

From the beginning of the year, Capitec also doesn't require proof of address to open an account.

Cool. It certainly seems the same with tymebank but they do a KYC process to increase limits (default is 20K) so I reckon Capitec must have something similar in place.

 

[zerocool2009]

Cool. It certainly seems the same with tymebank but they do a KYC process to increase limits (default is 20K) so I reckon Capitec must have something similar in place.

I opened an account online, not one single document. Been upgraded to the top package.

 

[Sideshow Bob]

I opened an account online, not one single document. Been upgraded to the top package.

Very strange - so you didn't even go to kiosk and your profile limit is now 500K? @TymeBank or @TymeGuy - how is this possible

• A “Just met” profile gives you an EveryDay bank account, access to the group’s saving tool and an account balance and transaction limits.
• A “Getting to know you” profile is one that has biometric data captured at the kiosk, and gives you the benefits above, increases transaction limits, and gives you the free Visa card. Because of the partnership with Pick n Pay, the card also doubles Smart Shopper points earned if linked.
• A “Good friends” profile is one that has residential address data captured. It has the benefits above, and again increases transaction limits, while offering interest of 6% interest from day 1, 7% after 30 days, 9% after 90 days. If you give 10 days’ notice after 90 days – you earn as much as 10%

 

[zerocool2009]

Very strange - so you didn't even go to kiosk and your profile limit is now 500K? @TymeBank or @TymeGuy - how is this possible

I got a card (debit card), at the kiosk, but that was it. No docs, no drama. But it was more a waiting period to see what is required to "up" the levels.