Thanks for dropping by Safe Investing South Africa. I am on a journey to build wealth my way. For any questions or comments, feel free to contact me.

11 Jan 2022

Tax Free Savings Account and Investment

What is a Tax Free Savings Account and Investment (TFSA)?

Since 2015, SA government decided to gift us with an amazing tax-free product. Contributions to a TFSA are not deductible for income tax purposes. Contributions and income (income tax, dividends tax or capital gains tax) earned in the TFSA are tax-free.

Here's the catch: this is a long-term savings benefit limited to R500,000 contribution in one's lifetime and R36,000 in one year. Withdrawing from this account should be avoided. 

Annual Limit

The Annual limits have been steadily increased from R30,000 in 2016, R33,000 in 2018 and R36,000 in 2021. Maxing the contribution to the Tax Free Savings Account and Investment is ideal. That and not withdrawing, I emphasise. Unused annual limits are forfeited. Important to note is that there is a tax penalty for amounts that are above the annual limit. The tax penalty is 40% on the excess contributions above the annual limit. 

Tax Free Savings Account and Investment

Who is Eligible for a TFSA?

South Africa allows all South Africans to invest in a Tax-Free Savings Account or investment. This includes children. Parents can invest on behalf of minor children.

Maxing out the TFSA should be a priority. The examples in the image above are an indication of how a TFSA can be maxed out every year.

  1. Once-Off Investment. One can invest the full annual limit in one payment. March is the first month of the financial period. However, one can invest at any time during the financial year.
  2. 12 Months Instalments. One can also spread their deposits in 12 equal instalments. This can be automated from your main bank account to the investment tool used for this purpose.
  3. Quarterly Deposits. The quarterly deposits work the same way as any instalment deposits. Any form of instalment works. The amounts deposited do not need to be equal.

The reason March is used as ideal in the example is that, the investment gets a growth benefit for the entire financial period. In a 11.5% return per annum for instance, R36,000 would have grown to above R40,000 at the end of the financial period.

The following accounts qualify to be used as Tax Free Savings Account and Investment:

  • Fixed deposits
  • Unit trusts
  • Retail savings bonds
  • Some endowment policies issued by long-term insurers
  • Linked investment products
  • Exchange traded funds (ETFs).

One can transfer between tax free savings accounts or investments as they change the investment vehicles or service providers. Service providers are responsible to provide SARS with all the information required for tax filing.

Are you investing in a TFSA? Please share the article.

Thank you for visiting Safe Investing SA. For daily motivation like us on FacebookTwitter and/ or Instagram.

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Author Mbini Kutta, a businesswoman, personal finance author and investor.

DAILY SAVINGS CHALLENGE

This blog is by design meant to inspire people to learn simple ways of building wealth. Over the years, followers email to get simple strategies to start paying debt, saving and investing. Every year we have a savings culture revival.  This year we are starting our daily savings challenge in February until November. 

daily savings challenge

We are adopting a programme that is similar to a stokvel model. I notice that people are more motivated to save when they are in companies of like-minded individuals or with automated bank transfers. If you are a loner like myself, adapt this daily savings schedule to your needs. These can be used for monthly, weekly or daily savings.

In the first table we are saving R10 on Mondays, R20 on Tuesdays, etc, and a total of R12,070 in the 10 month’s period from 1 February to 30 November. The last table enables one to save a total of R48,280. These totals are own contribution before growth in interest and returns.

How this Daily Savings Challenge Works:

1. Choose a plan that you are comfortable with from the image above. 

2. Decide on the saving frequency. It could be a low amount daily, a weekly amount or a bigger monthly savings amount.

3. Open a savings account linked to your main bank account to easily transfer the amount you have decided on as often as you choose. An interest-bearing account would be ideal for an emergency fund. Some use the Exchange Traded Funds for longer term investments. A savings pocket is usually an interest-bearing account that requires no minimum deposit. However, pay attention to the interest structure. A money market account could have higher returns. If the savings are for a specific cause/ timeframe, a notice account could be the best tool. The ETFs generally have higher returns and are best suited to longer term investments.

Be reminded that the totals in the image above are own capital only without interest or returns. Some of our readers are saving towards their:

Emergency fund.

Children school fees for the following year.

Deposit on a home.

Future renovations.

A wedding.

Deposit on a car.

Investment for retirement.

Investment for passive income like dividends.

Business capital.

Once off event.

Remember, depending on each one's needs, one can save in a notice account, money market account or invest in exchange traded funds (ETFs) for better returns. For those who prefer a higher amount, we will add a few more options. For now, choose from one of our daily savings challenge plans above.

Thank you for visiting Safe Investing SA. For daily motivation like us on FacebookTwitter and/ or Instagram.

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Author Mbini Kutta, a businesswoman, personal finance author and investor.

10 Jan 2022

2022 FINANCIAL GOALS

Have you set your own 2022 financial goals? For me the main goal is the standing 'project 2021 July to 2023 June' to double our net worth and monthly income without acquiring new physical assets. It is very ambitious but after such a challenging two years I reckon we deserve a bit of excitement. The previous post detailed the 2021 financial goals review. Let's dip into our 2022 financial goals:

1. Net Worth Tracking. Goals that are shared are more likely to be achieved. Like most bloggers, I come from that background where money talks are a taboo. But writing about my financial freedom journey helped me achieve my goals. So, my first goal is to keep myself accountable by tracking my progress here every quarter. The reason I choose quarterly is that, I update my net worth spreadsheets and report to my family about our progress quarterly. I used to do this monthly but realised that there is too much volatility in a short period. 3 months is also a short period but hey, there has to be a cut off time somewhere.

2. Keeping Focus. In my 2 years of rest I spent a whole lot of time on social media. I realise that I need to schedule my social media times. I can do with limited distraction in my life. Having strict work and family times without social media has become top priority this year. I am catching up on my reading. One huge book done and halfway the second one. I have also set a full day aside weekly to do work for others/freelance work.  

3. Earn More. Right now I am working on increasing our real estate income, as per the main goal above. There are three ways in which we are doing this:

  • Most of 2021 was spend renovating existing property. We had renovations on a small 2-bedroom duplex, our own home, and current renovations in the biggest unit in our multifamily property. The latter should increase the rental income of the unit by at least 60%.
  • I am working on a short-term rentals strategy using the Airbnb model. I will furnish the units that will be let in this way. The first property will be the unit that is in an upmarket residential estate. 
  • We are also working with our town planner to rezone a property which is in an erf earmarked for densification by council. This will be our first 'build to rent' property.
  • Lastly, I will work on increasing the income of this blog. I want to add a channel/ podcast to it by June. 

4. Debt. We will continue to lower the rental property debt. This is a new strategy because of early retirement. We may as well get rid of this debt. This is our only debt. 

5. TFSA. Of course, we are maxing our tax free savings accounts. Mr V spreads his contributions throughout the year. I do a once off payment towards the end of the financial year. I am more likely to forget to do this, so Mr keeps telling me to try and make my lumpsum investment in March. That way I get maximum growth benefit. I need to start listening. We both use ETFs as an investment vehicle for this. It makes sense to use stocks, since a TFSA is more suited to long-term kinds of investment. The Geek (our son) will be having his second year of maxing a TFSA in 2022-23 too.  

6. Education. The plan is to invest in tax education for personal growth this year. A short course to help grow my understanding and learn about new tax provisions and laws will suffice. 

7. Stocks. This is where we plan to invest more to maintain a well-diversified portfolio. We love property and are over exposed in that investment category. We are currently trying to focus on investing in equities. We have both local and international individual stocks and ETFs. 

8. Retirement. We continue contributing to our retirement accounts. We only have this increased by 10% annually. Mr V and I both have 2 retirement accounts each. We have a retirement annuity each, Mr V's employer linked pension and my pension preservation fund. I have been tempted to cash my preservation fund a few times in the past. But I also think I need this kind of a safe option.

9. Family Finance Alignment. Every quarter I track progress on our goals and discuss with family. This way, our plans are aligned. We all pay attention to global economic conditions, to reshuffle our investments as a need arises. I am the one tasked with a responsibility to take some sort of a lead on this this year. So, I start my days with some light markets reads.

10. Will vs trust. Right now I am investing in weighing the pros and cons of a trust. We still do not have a family trust. We have been dragging our feet because of the expenses that will go with the transfer of assets. I'm onto it this year.

11. Getting rid of assets. The other important item on my to-do list is getting rid of all small property units. I no longer want to keep the apartments in our portfolio. We currently prefer the multifamily rental property. We have 3 units to sell in the year. This will depend on the property market conditions. If prices drop, we will just hold a bit longer.

12. Giving. I keep forgetting to mention this. We give over 10% of our income as a principle. As a family we assist our parents financially and have a scholarship. We have foster kids that attend a small private school on this family scholarship. We believe in this kind of giving.

Please share your own goals with us.

Thank you for visiting Safe Investing SA. For daily motivation like us on FacebookTwitter and/ or Instagram.

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Author Mbini Kutta, a businesswoman, personal finance author and investor.

7 Jan 2022

OUR NET WORTH AND 2021 MONEY HIGHLIGHTS


 When Mr V (husband) and myself planned our lives together in our 20s we took a decision to focus more energies on our family and family businesses and less on top careers. We had decided on shorter career lives. This was before the ‘fire movement’ came to be. For those who do not know, ‘FIRE’ is an acronym for ‘Financial Independence Retire Early. We never imagined that this decision would be the one thing that gives us purpose and a strong joint passion. Financial independence and early retirement were the goal. I have been outside formal employment for almost 5 years now. I also took my semi-retirement break at 35.


The past few years were super challenging. We lost my mother in December 2020. The pain that I went and am still going through cannot be articulated. My mother was a close friend. The year 2020 was the most difficult year globally. I have not blogged in both 2020 and 2021. However, in 2021 I went back to tracking my finances. This was a needed distraction. 

Back in January 2020, our family’s financial plan was to double our net worth and income in two years without acquiring new physical assets. Then 2020 turned to be the weirdest period of our lives. I rested more that year. The plan to double our net worth was only implemented in mid-2021. My excel spreadsheets and graphs are beautiful to watch every quarter.

Whilst excel is great, I miss keeping myself accountable through blogging. I will use this platform to keep track of the progress in our ‘project July 2021- June 2023’. It will take a lot of doing to achieve this goal but it is doable. The detailed plan for 2022 will follow in the next blog post.

2021 Highlights:

1.Stocks. What we have done from July 2021 is increase our investments in stocks. We did get lucky with the SASOL dip and the great performance of the US dollar stocks in the past year. The year or semester rather, was great. We did not forget our tax free benefit accounts which are also in Exchange Traded Funds (ETFs).

2. Rental Income. We also had major renovation projects to increase the rental income. One renovation project was in our multifamily let. We renovated the biggest unit. This property has 6 lease contracts in it. We are finalising this remodel project soon. The renovation should increase the income of the unit by 60%. The plan was to further develop this property. The city’s 2018 Regional Spatial Development Framework (RSDF) removed the erf from the area that they earmarked for densification. So, we could not.

3.Retirement and savings. We also contribute to our retirement accounts monthly. We each have two accounts with one being a retirement annuity. The performance is not stunning, but they are a great addition. We also keep some small figure in savings to serve as an emergency fund. We no longer have a big sum in the emergency funds accounts. Interest rates are too low for that. My zero-fee credit card is my emergency account. I never pay interest on a credit card.

4. Gigs. I achieved more in 2021 than I did in the past few years. My freelance income has been channelled to fast-track Mr V’s retirement. This deserves a separate post.

5. Content creation. My content creation income was very small. Like I mentioned, I went AWOL. See next blog post for the plans for 2022 on this.

6. Speaking. I was a visiting lecturer and had a few speaking appearances last year. Noteworthy is my appearance as an expert at an ‘Africa Trade Conference 2021’ and the full week radio show talks.

7. Wealth transfer. The Geek (our son)  turned 18 in 2021 and started on the investment journey of his own. The boy has done very well and invests in the US stocks and ETFs exclusively. He has impressed us by his focus on managing his finances. We have discussed building a good credit rating record and getting his first credit card. We are also helping him max his tax-free savings account. 

8. Budgeting. I still work with a budget that is in my head. Budgeting never works for me. I make my targets, save, invest and then spend. Paying myself first helps with my impulsive habits. 

9. Debt. On debt, we still only have investment property debt. We also have reduced this remarkably in 2021. We are generally not bothered by rental property mortgages. Our priority is having no debt in our primary home and no debt anywhere else. This has always been the case.

10. Travel. I had plans to travel in 2021. Ireland and Egypt were on the list. Due to the pandemic I only managed to travel between Angola and South Africa. I am looking forward to open borders. The family’s feet itch.

11. Comfort. Our primary home was the most costly project for the year. We are a family that believes in comfortable living, and always prioritise comfort and healthy food. OH, we sure love our food. We did get approached by interested prospective corporate tenants to lease this property. I was welcoming the idea of great income, but Mr V and the Geek refused to let go.

12. Finally, 2021 had its challenges. We had a few months of vacancies and unpaid rentals due to the pandemic. This is not common as we invest mainly in the heart of national government and diplomat presence. Our 2022 goals will highlight how this discomfort pushed us to grow. Our investment city is also growing and is now with a population of over 2.5 Million.

Thank you for visiting Safe Investing SA. For daily motivation like us on Facebook, Twitter and/ or Instagram.

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Author Mbini Kutta, a businesswoman, personal finance author and investor.

26 Feb 2020

WHY WOMEN NEED TO START BUILDING WEALTH EARLIER IN LIFE

Personal finance is one of the areas that have always been considered gender neutral. But, is it? The gender gap in economic opportunity is not closing quick enough. This means that women must work more than twice as hard as men to acquire similar amounts of wealth. According to the United Nations, 90 percent of women income is invested back into their families, compared with 35 percent for men.

We are working with 10% of our income to improve on our lives and secure better future for ourselves and the next generation. This is despite the fact that money issues impact more on women than they do on men. For starters, women on average live longer than men. The average life expectancy at birth stands at 67 years for males and 71.1 years for females. It makes sense for women to take financial planning and management much more seriously than men do.

Secondly, women have a shorter work life and are likely to take breaks throughout their work life. Maternity leave for one easily costs up to six months’ worth of income per child. Raising a child could mean extending the work break by another three years or permanently. What this means is that, women need to start building wealth very early in their lives by saving a higher portion of their income to provide for the time off work. Negotiation skills are also needed to get more flexibility at the current workplace to earn income during these breaks. It is important for women to constantly contribute to their retirement plans.

Married women tend to rely on their spouses for financial support. In cases of a separation or divorce, they are forced to start taking full control of their lives and in most cases their children too. It is a hard way to learn. Financial planning is a practical skill that needs to be sharpened throughout one's life.

Most single parents are mothers. Primary caregivers of children in single parent households are most likely to be women. Often, single mothers must manage with no financial support from the fathers of their children. When the law forces men to provide for their children, it is often inadequate financial support for the needs of the children. Women’s personal finance empowerment is never overrated.

Women earn lower income compared to men. Earning low income means lower contributions to pension and retirement funds. This is extremely limiting, especially when it comes to wealth building. One needs to make money in order to save money. As women, we need to start saving way early in our lives and save a larger portion of our income.

Not only are we earning less and spending more on our households, but we're also investing less than men do. The gender investment gap is a reality.

Finally, women need to up their game when it comes to claiming what they deserve. Negotiation skills are key to bridge the existing gap in salaries. They also need to pay themselves first through savings and investments. There is a need for intentionality in building wealth.

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Author Mbini Kutta, a businesswoman and real estate investor. The article first appeared in an offline publication The Apple of His Eye.

8 Jul 2019

PROPERTY INVESTING FOR BEGINNERS

Another interesting weekend chat with a blog reader and Facebook follower, Ms B about property investing for beginners. This reader has an impressive kind of discipline. I like having chats with young investors.
Hi Mbini,
I have been following your blog and Facebook posts about real estate on your timeline and on Facebook groups. I was hoping you could advise. I just sold one of my properties expecting a return of R80,000. The property was financed by the bank.
I do have another property, which I bought for cash for R650,000. I also have some cash loan and credit card debt which amounts to R90,000.
I drive an old small car with 260,000 km mileage. The car needs to be replaced but I'm not sure of the route I should take when buying a car. I know I will have to settle my debt first.
Is there a way that my paid up property can assist in acquiring more real estate investments?
Thank you.
Ms B
property investing for beginners
I get a lot of questions related to property investing for beginners. I hope that unpacking the reader's situation will empower more readers. I posed a few questions to Ms B to get more clarity on her current financial situation.
Mbini: Do you plan to acquire more investment property or different kinds of investments?
Ms B: Yes, I want to invest in more property. I will be settling R60,000 of the debt by the end of next month. You may also advise otherwise.
I'm very worried about Ms B's R90,000 personal loan and credit card debt. This is very expensive debt. I would prefer the property debt to credit card debt. The interest rate one is charged by banks on the credit card debt and personal loan is quite high. It is advisable to pay up the debt as Ms B already plans to.

Coming to the paid up property. If this paid up property worth R650,000 is a rental unit, I would have preferred to owe on it instead. Property debt is a much cheaper debt. Interest rates on property are much more competitive than on the credit card. 

The other important factor to consider is the debt's tax efficiency. Interest on the homeloan attracts the tax deduction. This is one of the biggest benefits of investment property. The main aim is to minimize tax liability. To keep the overall taxation low, an investment property with some debt on it is more desirable.
Finally, if I were in Ms B's shoes, I would work on accessing money from my existing property and settle my personal loan and credit card debt, if at all possible. Accessing cash from a property can be done by refinancing the paid up property. The cash would then be used settle the debt and towards investing in the second investment property. It is very important to make sure that the interest rate one is charged  on the new homeloan is competitive. Even better, one must make sure that the new mortgage is an access bond facility, to ensure that cash is easily accessible in future. 
Ms B: Let me think about it, do more research and get back to you with more questions. I like your thinking, thank you. My challenge is always trying to play it safe.
Mbini: I can see that. Playing safe in investing does not always work. All the best.
We will be posting more on property investing for beginners in future, especially given the current poor economic climate. 

Feel free to email your questions through our contact page. I trust that you have started with the savings challenge. We have four steps and groups. 1. Debt pay-up, 2. Emergency Fund, 3. Other Savings Accounts, and 4. Investments. Please do keep moving. Start slow but do not stop. For daily motivation like us on Facebook, Twitter and/ or Instagram.

30 Jun 2019

PERSONAL FINANCE GOAL REVIEW JUNE 2019

My first month of goal setting did not go very well. A month is too long for one to remember their goals apparently. I was supposed to check my list every Sunday. I did not. Oh well. The personal finance goal review for June goes...
Personal Finance Goal Review
JUNE PERSONAL FINANCE GOAL REVIEW

NET WORTH: I will have to check the values of all my investments and real estate debt, add determine the net worth. ROUGHLY DONE

EMERGENCY FUND: DONE

OTHER SAVINGS: 32 days notice account. I  was supposed to top this up. NOT DONE

GIVING: Over 10% DONE

REAL ESTATE: I am only doing repairs to and cleaning up the property that will have new occupants mid-June. DONE

STOCKS AND DIVIDENDS: Exchange Traded Funds (ETFs), invest. NOT DONE

INCOME: Improve on online income. NOT DONE

JUNE NON-FINANCE GOALS:
Family:  Travel sometime in June for a short family holiday. DONE
Personal Improvement: I need to study more. I commit to competing 2 chapters this month. NOT DONE
I will also walk more this month to get close to my 10,000 steps per day. NOT DONE
I will also get back to a strict Keto diet with some intermittent fasting thrown in for good measure. NOT DONE
Social: I will meet a friend or associate for coffee every two weeks. PARTLY DONE

Please help rate the performance on my June personal finance goals. All my energy, time and money was consumed by the property cleanup. I never knew that a boundary wall costs that much. I spent a lot of money on unplanned expenses. 
Did you have your own goals dotted down? Let us know if you are up for the challenge in July.

Feel free to email your questions through our contact page. I trust that you have started with the savings challenge. We have four steps and groups. 1. Debt pay-up, 2. Emergency Fund, 3. Other Savings Accounts, and 4. Investments. Please do keep moving. Start slow but do not stop. For daily motivation like us on Facebook, Twitter and/ or Instagram.

28 Jun 2019

SAVING AND INVESTING STRATEGY

I had an interesting question and answer session with one of my readers. Her questions were on developing a saving and investing strategy to raise funds in a short period of time.
Hi Mbini
I'm always inspired by your posts. I have learnt that it is possible to pay property within the record time. I currently have two properties that are paid up. I paid up my last property in just 12 months. The price was not so bad.
I am now strained from that transaction and paying up the property. As a result I am currently a tenant, renting with an intention to buy. After twelve months of saving I am hoping to have raised enough capital as part payment. I am in a position to save between R200,000 and R300,000 monthly for the next twelve months. Do you have advice on saving options?
I hope this makes sense and thanks for your time.
Ms S
saving and investing strategy
Before we look at the saving and investing strategy for Ms S, I have to state how impressed I am with her discipline. She has done very well.

Twelve months is a short time for long term type investments like stocks or shares. Stocks are high return over a long term. One might even lose some of the money in the short term. I would personally work on preserving my capital by saving the in fixed deposit accounts monthly. Every month I would just start a new fixed deposit account. I would also look at the highest interest money market accounts including the notice accounts. The interest is not going to be as good as the returns in other investment vehicles, but given the time factor, this seems to be the best that one can do.
Where do I start with the search. I can even split this between savings and long term investments.
If you are keeping some by investing in a long term product, I would consider the Exchange Traded Funds (ETFs). I am assuming that you are not very familiar with the stock investments. You might need to have a managed kind of investment process. I think you will find a nice ETF product with high returns.

For the short term like 12 months, check your bank's highest return on investment products. That will be on the bank's website. I wish you the very best. Please let me know how it goes.

Please feel free to email your questions through our contact page. I trust that you have started with the savings challenge. We have four steps and groups. 1. Debt pay-up, 2. Emergency Fund, 3. Other Savings Accounts, and 4. Investments. Please do keep moving. Start slow but do not stop. For daily motivation like us on Facebook, Twitter and/ or Instagram.

25 Jun 2019

INTEREST BEARING EMERGENCY FUND ACCOUNT

We are looking at one more good interest bearing emergency fund account. You may refer to Capitec's Global One account in the previous post. Again, I confirm that we are not paid by below mentioned service providers to provide this information.

Our Twitter handle @SafeInvestingSA asked a question:
"Do all banks have an interest bearing 24-hour or 1 day notice account that requires an initial investment amount of below R1000. Our #SavingCommunitySA needs that or similar for individuals."
interest bearing emergency fund account
Nedbank was one other bank that responded as follows:
"We have various Investment accounts with different offerings and minimum Investment amounts. Click on the link for more info on our account: xxx  :)".
We have looked at the Nedbank money market accounts and came up with the one that is most suited to the Emergency Fund. JustInvest account is our interest bearing emergency fund account of choice. One may start very slow as the minimum investment amount is only R500. This makes it ideal for the new savers.

This is the only one day or 24 hour notice account that we know of. I find the notice account with only one day notice fascinating. One day notice is long enough to ensure one sleeps on the decision to withdraw funds, whilst it is short enough to take care of an emergency.

One can use their debit account for monthly stop orders into this money market account. A great idea to ensure that one pays themselves first. This account earns interest from 4% at the time of publication of this article. The higher the balance the higher the interest earned. JustInvest also attracts no monthly fees. The interest on the balance at the tie of publication is:
Below R2,500 interest is at 4%; R2,500 – R24,999 at 5,25%; R25,000 – R49,999 at 5,75%; R50,000 – R99,999 at 6,2%; R100,000 – R249,999 at 6,3%; R250,000 – R499,999 at 6,35%; R500,000 ­– R999,999 at 6,4% and R1 million and above at 6,5%
For our emergency savings of R5,000 to R10,000 our interest bearing emergency fund account earns about 5%. This is not a bad interest on only one day notice.

I trust that you have started with the savings challenge. We have four steps and groups. 1. Debt pay-up, 2. Emergency Fund, 3. Other Savings Accounts, and 4. Investments. Please do keep moving. Start slow but do not stop. For daily motivation like us on FacebookTwitter and/ or Instagram.

INTEREST BEARING EMERGENCY FUND ACCOUNT

Our quest for good interest bearing emergency fund account lead us to the social media platforms. We are also analysing the Nedbank JustInvest account in the next post. Let me confirm that we are not paid by below mentioned service providers to provide the information below.

Our Twitter handle @SafeInvestingSA asked a question:
"Do all banks have an interest bearing 24-hour or 1 day notice account that requires an initial investment amount of below R1000. Our #SavingCommunitySA needs that or similar for individuals."

Only two of the four banks responded. Capitec responded
"We have a savings plan as an addition to our Global One savings account however there is no 1 day notice. You can get the funds immediately in emergencies".
Having checked the Global One account we agree that it is indeed a good interest bearing emergency fund account. At the point of writing this article Global One would get one a transaction account and four free savings plans. This works much better if you are the Capitec client as this is linked to the debit or credit card.

Most importantly for us is that this account earns from 5% interest per year on the balances. This is again at the time the article was first published. This is obviously adjusted with changes in the South African interest rates. The account earns 5% for R0 – R24,999 balance, 5.4% for R25 000 – R99 999 and 5.65 for R100 000 and above. Remember that we mostly save R5,000 to R10,000 in our interest bearing emergency fund account. 5% is not a bad interest on an account that has money readily available.

Lets get to the catch. One needs R25 minimum balance and a monthly administration fee of R5. But this is for the main account which you use for your daily banking activities. Hence the savings plan account itself is marketed as free. One may then link the four free savings plans to their main debit account.

I trust that you have started with the savings challenge. We have four steps and groups. 1. Debt pay-up, 2. Emergency Fund, 3. Other Savings Accounts, and 4. Investments. Please do keep moving. Start slow but do not stop. For daily motivation like us on Facebook, Twitter and/ or Instagram.