Was just in the bank this am when my eye caught the latest offering from Std Bank – “Contract save” – the byline is “pay no fees and commissions”. So what is it and is it any good?
In a nutshell it appears to be a form of “contractual” saving with a minimum term of 12 months although there are no penalties if you cant afford to continue paying at any stage. The minimum premium is R100 and the current interest rate is 4% with a bonus of 0.5% at the end of the year. If your chosen term is longer than 12 months (say 3 years) you can access 10% of the total funds after 12 months with no penalties…more than 10% and there appears to be a R200 penalty.
By way of example:
- R100 per month for 12 months = R1222 at the end of the year +an extra 0.5% interest = R1228
This is not bad – especially as far as traditional bank offerings go, but it is not the “best” by a long way. Capitec Bank are still streets ahead in this space – they are still offering 7% on their daily savings account on balances below R10000. No minimum term and instant access (no penalties).
And then there are money market unit trust accounts – Metropolitan Unit Trusts take a monthly debit order of R1000 into their money market unit trust account (and you will get about 6% per annum in interest). For my money (and on amounts less than R10000) Capitec are still King!
