Savings Accounts

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Savings Account

SAVINGS ACCOUNT – ALL INCOME

Last updated 20 Feb. 2016

Please note that the prime rate was adjusted late July 2015 and our rates will be adjusted as soon as the banks make their new rates available

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Account Name Flexi Account Transact account Global One Banking Facility Smart Account MobileMoney Account Transact Plus 4Me account Flexi Card Account MarketLink E-Plan Plus Plan Wizzit Account
Age Criteria (years) Over 18 18 or letter from parent or guardian in case of minors 18 or letter from parent or guardian in case of minors Over 18 Over 16 Over 19 0 – 18 Over 16 Over 18 Over 18 18 or letter from parent or guardian in case of minors 18 or letter from parent or guardian in case of minors
Monthly income criteria Not applicable Not applicable Not applicable Not applicable Not applicable R 00.00 Not applicable Not applicable < R5000 Not applicable Not applicable Not applicable
Minimum opening balance R 60.00 R 20.00 R 25.00 R 0.00 R 00.00 R 50.00 R 50.00 R 35.00 R 00.00 R 500.00 R 50.00 R 0.00
Debit card issued Maestro or Visa Electron debit card Maestro or Visa Electron debit card Mastercard debit card(chip card) Visa Electron debit card MobileMoney MasterCard Maestro or Visa Electron Debit card Maestro or Visa Electron debit card Visa Electron debit card Maestro debit card Maestro debit card Maestro debit card Maestro debit card
Monthly Fee R 15.00 R4.75 R 5.25 Unlimited option – R49, PAYU transact option – R12.50 R 0.00 R16.00 (0.00 if balance is R5000).00 0 if min balance of R10 maintained R 8.70 R10.00 (R5.00 if more than 60 years & 11 months) R18.00 (R0.00 if monthly balance more than R1 000) R 18,90 R0.00 (R39.99 once off start up fee)
Monthly Internet Banking Subscription fee R 0.00 R 0.00 R 0.00 R 0.00 Not available R16.00 R0.00 Not available R 22.00 R 0.00 n/a R 19.99
Fee rebate No No No Yes No No No No No Yes No No
Penalty fees Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes
Interest Rates 0.00% Tiered – up to 3.90% Tiered – up to 5% Tiered – up to 2.75% Tiered upto    1 % 0.00% Tiered – up to 1.00% 0% 1.00% Tiered – up to 1.25% Tiered – up to 2.90% 0.00%
Rewards Schemes Not available Not available Not available Not available Not available Not available Not available Not available Yes Yes Yes Not available

Here is a benchmark comparison from Australia.

About Savings Accounts

South African Savings Accounts are not structured particularly well for saving as they have low interest rates. They are used more as transactional accounts or also known as transmission accounts.

Most Savings Accounts are accessed through ATM/debit cards (Visa Electron or Maestro) and through Internet, Telephone and Cellphone banking. Functionality is slight more limited than a cheque or current account as you don’t have access to overdrafts, cheque books or cheque cards.

The benefits of a savings account

In a market where there is a myriad of different investment options (unit trusts, wrap funds etc.) to choose from, a ‘traditional’ financial product like a savings account could easily be overlooked. However, the flexibility and security offered by savings accounts have benefited large numbers of consumers over the years. Saving account holders usually regularly set money aside in one of these accounts for a specific purpose. The funds in the account are often used for an overseas holiday, a deposit on a car, transfer fees or costs on a bond, a new household item etc. Alternatively, some savers choose to rather contribute money for an unforeseen expense. Some of the benefits of a savings account are:

Flexibility
With a savings account you can decide how much you can afford to part with. You can choose to invest a regular sum into the account, or alternatively decide to transfer whatever is left of your salary at the end of the month. You do not have to contribute a fixed amount at regular periods or a lump sum – as with most investment products. Your own financial situation is the only factor determining your contribution.

Access
Savings accounts offer you immediate and unlimited access to your funds. With an ATM card, you can withdraw your money out of the account if you wish – at any time of the night or day. This is quite different from investment vehicles like deposit accounts or unit trusts where you usually have to give notice before you can withdraw funds or where the process of claiming your money back takes a few days. Savings accounts also offer the benefit of being fully transactional. Most accounts offer the same facilities (debit orders, third party payments etc.) as cheque accounts.

Security
Another benefit of a savings account is that the bank gives you a guarantee that it will pay out your investment plus interest. This is quite different from investment products. If you invest in a unit trust and the market crashes, there is no guarantee that you will get out the amount of money you have invested in the fund. Investment products usually, however, offer better long term returns. If you have short to medium term savings needs or do not know when you want to access your saved funds, a savings account is perhaps the best vehicle. Funds in savings accounts usually earn favourable interest rates. Interest rates can be left to accumulate.

Costs
You do not have to pay anything to open a savings account. The only costs involved are transactional or penalty fees (depending on the type of account you have). With unit trusts and other investment products you have to pay commissions or fees when you buy the product and most products also have an annual service or administration fee. If you do have extra money on hand that you want to invest for an undetermined time, and you want unrestricted access to your funds, a savings account is probably the way to go. It will offer you the necessary flexibility as well as favourable interest earnings.

Who can have a savings account

Just about everybody can have a savings account. Children can open special savings accounts at banks to teach them the importance of saving. Very often the fees on children’s savings accounts are free or considerably lower than those for general clients. As an adult, unless you intend stashing your money under your mattress, you too should have a savings account. You should be aware that banks will close savings accounts where there has been no movement in the account for any length of time, such as two to three years. This does not mean that you will lose any money left in the account. The bank will move the money into a suspense account. You will earn interest on the money and it will be paid out to you.

What does it cost? It costs nothing to open a savings account although, depending on the savings account product you choose, you may have to keep a minimum balance in the account. However, you are charged for transactions such as depositing money and making withdrawals. At some banks these charges fall away if you maintain a certain balance in your account. This can range from R5 000 to R10 000. Banks are encouraging customers to do transactions from their savings accounts electronically. So it is much more cost effective for you to use an automatic teller machine (ATM) rather than to go into the branch, queue and do your business at the teller. Banks charge you more on transactions if you insist on a book rather than a card. Book-based accounts are still available at some banks, at a cost.

Glossary

Credit interest rate – interest paid to you if you have credit in your account

Fee rebate option – maintain a minimum balance (specified by the bank) in your account and receive cash back

Penalty fees – fees payable for any wrongdoing on the account (ie denied transactions, returned payments etc)

Senior fee concessions – some banks offer fee discounts/options for seniors