The JSE and finance forum for South Africa
General Category => Shares => Topic started by: DeonC on January 31, 2017, 02:34:07 pm
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Good day to All
New member here.
As per title, do you guys keep some of your money in a fixed deposit? Finbond is offering 10.65% intersest. Capitec is offering 10.05% These look like very good deals to an ordinary citizen like me. What do you guys think? What are the negatives associated with this? Except that your money is tied up for 60 months
Sorry mods if this is in the wrong section
Thanks
D
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Nedbank Green Savings Bonds 12.58%
https://www.nedbank.co.za/content/nedbank/desktop/gt/en/personal/interest-rates/account-interest-rates.html (https://www.nedbank.co.za/content/nedbank/desktop/gt/en/personal/interest-rates/account-interest-rates.html)
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Nedbank Green Savings Bonds 12.58%
https://www.nedbank.co.za/content/nedbank/desktop/gt/en/personal/interest-rates/account-interest-rates.html (https://www.nedbank.co.za/content/nedbank/desktop/gt/en/personal/interest-rates/account-interest-rates.html)
Sounds like more than it is. That is of course the effective rate (compounding) and not the nominal rate of 9.80%
Not bad but 60 months is too long, rather go for a money market fund @±7.5%-8%
Rates may rise during those 5 years and then you won't be locked in to 9.80%
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I may be wrong but I think these could be mortgage participation bonds and as you state your funds are locked in for 5 years.
I don't think there is anything wrong with this investment class but you really need to sit down and look at your whole investment horizon and decide how much you want to invest in different classes of investments. Also there is no way that you can exit these instruments ahead of time unless you can prove "necessitous circumstances" which could be medical or death, but there will be penalties raised for early release
I would suggest that you look at structuring an investment portfolio, consider what you may need in each class of investment and if a component is investing in the stock exchange then read up and attend seminars on how to invest - banks at one stage used to run such courses as did the JSE from time to time
Finally ask question of this forums community - never be afraid to ask question even those that may seem silly to you - nothing worse than getting your fingers burnt because you failed to ask a question
Good luck
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I use capitec fixed deposit for short term saving goals. Like my upcoming trip to Oz. Put the money away so it doesn't get used, earn some interest(7.75%)