The JSE and finance forum for South Africa
General Category => Shares => Topic started by: DeonC on March 07, 2017, 03:47:34 pm
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Hi Al
African Bank is now offering 10.50% on Fixed deposit. I am very Interested. But how safe is it?
The SARB owns 50% of African
6 Banks Hold 25%
Thanks
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Erm.... O.O
/googles
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https://www.africanbank.co.za/fixed-deposit.html#
Interesting. Suppose they're doing it to get customers. Not sure if I'd want to be locked in for 60 months though.
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Not bad. I currently use capitec for short term fixed. 7.75% on 7 months. Minimum ivestment amount is a lot higher though.
https://www.capitecbank.co.za/global-one/save/single-deposit-fixed-term-savings-account
But to respond to your question, I have no idea how safe AB is.
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Rather ask will you put your life savings in an African bank account.
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Jip. Planning on putting more than half of my all my money in there. R1m. Thats why I am a bit cautious ???
Capitec offers 10.05%
Nedbank Offered 9.56%
All on 60 months.
I have some ETF's, and to be honest I dont think any ETF will provide 10% p/a for the next 5 years. Or am I wrong?
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sO u WiLL Be PUttING R500,000 oR R1,000,000 (NoT To SURe as PER note) IN A bAnK ThaT HAS JUSt BeEN RescUeD. :question: I would understand IF THey loaned YoU a R1m.
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Jip. Planning on putting more than half of my all my money in there. R1m. Thats why I am a bit cautious ???
Capitec offers 10.05%
Nedbank Offered 9.56%
All on 60 months.
I have some ETF's, and to be honest I dont think any ETF will provide 10% p/a for the next 5 years. Or am I wrong?
Try this: https://mytreasury.co.za
With that amount of money I'd rather phone Investec. FNB can give you 9.15% + you won't have to convince yourself every day for the next five years that your money is safe.
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Another option is Coronation Moneymarket Fund
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Thanks Guys, following up on all the recommendations
As you can see, from the post, I am still a newbie, when it comes to money and investing.
Any further advice will be appreciated.
On a Side, How safe is it, to mention amounts on a public Forum like this?
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The best option looks to be Nedbank, with 9.56%
That should be safe. I hope.
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I will not touch them
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Thor>>
Will not touch African B, or Nedbank?
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Jip. Planning on putting more than half of my all my money in there. R1m. Thats why I am a bit cautious ???
Capitec offers 10.05%
Nedbank Offered 9.56%
All on 60 months.
I have some ETF's, and to be honest I dont think any ETF will provide 10% p/a for the next 5 years. Or am I wrong?
I bought my STXIND in June 2013 and they have shown a capital appreciation on the initial investment of 45.4% to date, plus over and above that there has been a reasonable capital stream so ETF can give you reasonable returns and your funds are readily accessible under some binding conditions - notably tax regimes
I think funds with the Banks are pretty much guaranteed returnable as if any of the big 4 banks had a glitch then the others would rally around to assist as the damage of failure would be devastating on the banking (including SARB) fraternity.
Also investing for 60 months is not too long a period if your need is to live off this investment - but then you need monthly interest which gives you a slightly lower interest rate. People need to weigh up whether it isn't better to take interest monthly and if not needed then invest in another investment instrument to gain more interest or capital gains/or both, in preference to taking interest at the end of the 5 year period.
Interest rate movements at the moment are a pretty hot topic as some analysts say rates will increase whilst others say they will fall - so who you believe is most difficult
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Thanks gcr.
Let just have a quick comparison:
ETF: 50% over 5 years
Initial investment R100 000
5 years Later: R 150 000
Fixed deposit at 9 p/a%
Initial investment: R100 000
5 years later: R 153 000
Fixed Deposit is less risk, than ETF. Therefore according to the above it should be the better investment. Less risk with similar returns?
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Thanks gcr.
Let just have a quick comparison:
ETF: 50% over 5 years
Initial investment R100 000
5 years Later: R 150 000
Fixed deposit at 9 p/a%
Initial investment: R100 000
5 years later: R 153 000
Fixed Deposit is less risk, than ETF. Therefore according to the above it should be the better investment. Less risk with similar returns?
50% over 5 years is 8.45%.
STXIND five years ago today was at 3100 and today it is at 6634. That's 16.43% pa (you can calculate it yourself if you want: http://finblog.co.za/tools/annualisedgrowth)
There's no guarantee that it'll do that in the next 5 years but that's where risk vs reward comes in. If you are closer to retirement age and cannot afford to lose a substantial amount of this money then shares is not where you want to be.
BTW, if you do not have a TFSA you can make use of Investec's. It's basically a fixed deposit but no tax and they give it at 8.4% I think. You can at least put some of the money in there over the next five years if you wish.
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Hamster you wrote" If you are closer to retirement age and cannot afford ............." it has been proven that share markets generally advance over time. Similarly there are the occasions where markets drop quite significantly, but, they do tend to correct themselves within a reasonable length of time.
To my mind it makes no difference whether you are near to retirement or not, and, that on retirement you need to be cautious (I am not talking about being reckless) in terms of your investment approach.
I invest in the market even though I retired 12 years ago and have no intention of even getting out of the market, I may review my portfolio should there be a major crash but only to rebalance my portfolio, or follow some other bargains. I have been exposed to every market correction since the 70's and within a few years have always ended up in a better situation financially.
I can't speak for others but my share portfolio is used specifically for wealth creation and is not used to augment my pension and my current comfortable lifestyle, but, I am a realist so there may come a time in 10 - 15 years time where I may have to dip into my portfolio to support my pension, but, quiet frankly by then my share portfolio would have doubled
So I am certainly not in the camp that advocates caution when investing either near or in retirement (good basic fundamentals must be applied when selecting your share portfolio, cavalier buys will burn you), but by the same token I would not advocate that people who have either commuted part of their pension or have taken funds out of investments on which they need to survive and put the funds into the share market - that may well end up badly.
My focus is very simple in application - when I die and my wife outlives me she will enjoy 50% of my then pension and my share portfolio will then generate sufficient dividend streams to assist with her living and she may have to sell some shares from time to time to top up her needs, but, the reality is that when I die her financial situation does not change for the worse but does change for the better
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Hamster - also on the TFSA accounts the only reason I am putting money into them is because you can trade over this account as, as yet Treasury have not closed this loop hole - so no need to observe the 3 year holding period. So those people who would like to test their hand at trading they could now have the princely sum of R 90,000 in your TFSA.
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Hamster you wrote" If you are closer to retirement age and cannot afford ............." it has been proven that share markets generally advance over time. Similarly there are the occasions where markets drop quite significantly, but, they do tend to correct themselves within a reasonable length of time.
To my mind it makes no difference whether you are near to retirement or not, and, that on retirement you need to be cautious (I am not talking about being reckless) in terms of your investment approach.
I invest in the market even though I retired 12 years ago and have no intention of even getting out of the market, I may review my portfolio should there be a major crash but only to rebalance my portfolio, or follow some other bargains. I have been exposed to every market correction since the 70's and within a few years have always ended up in a better situation financially.
I can't speak for others but my share portfolio is used specifically for wealth creation and is not used to augment my pension and my current comfortable lifestyle, but, I am a realist so there may come a time in 10 - 15 years time where I may have to dip into my portfolio to support my pension, but, quiet frankly by then my share portfolio would have doubled
So I am certainly not in the camp that advocates caution when investing either near or in retirement (good basic fundamentals must be applied when selecting your share portfolio, cavalier buys will burn you), but by the same token I would not advocate that people who have either commuted part of their pension or have taken funds out of investments on which they need to survive and put the funds into the share market - that may well end up badly.
My focus is very simple in application - when I die and my wife outlives me she will enjoy 50% of my then pension and my share portfolio will then generate sufficient dividend streams to assist with her living and she may have to sell some shares from time to time to top up her needs, but, the reality is that when I die her financial situation does not change for the worse but does change for the better
To each his own, there never is one rule or approach that fits everyone. You clearly know what you are doing and can make your own risk decisions.
My dad, on the other hand, only ever dealt with regular banks, building and selling properties, owning a business and made a reasonable amount of money that way. There is no way he should be touching equities though - he's never done it before (unless he gets a professional to help him out but I reckon their advice would be to go for something with guaranteed returns anyway :p )
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Hamster - also on the TFSA accounts the only reason I am putting money into them is because you can trade over this account as, as yet Treasury have not closed this loop hole - so no need to observe the 3 year holding period. So those people who would like to test their hand at trading they could now have the princely sum of R 90,000 in your TFSA.
20% dividend tax-free could really be helpful for somebody living off dividends :p
Will take you quite some time to amass enough funds in there though to make it worth your while, not sure if there are any worthwhile dividend-focused instruments or funds available in TFSA's either. On the ETF side you have two dividend ETFs, a couple of property ones and the preference share one. Probably not good enough for reliable income
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The best option looks to be Nedbank, with 9.56%
That should be safe. I hope.
I am surprised that nobody has pointed this out yet, but you are about to commit one of the biggest investment mistakes there is, putting all your eggs (or almost all) in the same basket.
Open up multiple accounts at different banks and spread the risk. I have four investment accounts at four different companies and two bank accounts at two different banks.
Investment mistake 2, putting too much in cash. You do need some cash, but not too much. Once you have enough cash to fund 6 months or max a year of expenses, you really don't need any more cash.
Investment mistake 3, having too much capital in Rands. Try to get some international exposure.
Do you have any debt or a home loan? Pay that off first.
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The only time a thought of Nedbank ever crosses my mind is if I think Noah and his Ark. I imagine that there was an ancient Nedbank ATM in there somewhere, maybe right next to the hippo family.
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The only time a thought of Nedbank ever crosses my mind is if I think Noah and his Ark. I imagine that there was an ancient Nedbank ATM in there somewhere, maybe right next to the hippo family.
When I have friends over from overseas they always laugh at Nedbank, because NED stands for Non-educated delinquent. Maybe I should get some less snobbish friends, oh well.