Q: My husband and I have a piggy bank at home that we put a few hundred rands in each month for a rainy day. I’m a bit concerned about leaving it lying around. What’s the best place for it so we can make the most of that money?
A: The funny thing about stashing cash under the figurative mattress is that it’s a guaranteed way to make your money disappear. This isn’t because of kleptomaniac tokoloshes that might steal your money in the night – it’s because of a little thing called inflation. Inflation is why a can of Coke used to cost me R2 at my primary school tuck shop and now costs R10. Inflation in South Africa has averaged at about 5,5 percent a year over the past decade. So unless your cash is growing by at least that much every year, you’re actually getting ‘poorer’.
Your best options for rainy day savings are either to put your money in a fixed-interest savings account or a Money Market fund. The best fixed-interest savings account at the moment is Tymebank’s Goalsave account, where you can get up to 10 percent interest if you can give them at least 10 days’ notice before pulling out your money. But Capitec’s interest rates on savings accounts are also impressive, and more flexible. Shop around.
Q: I would like to invest in offshore exchange-traded funds (ETFs) without the assistance of a broker. W