This is another offering from Std Bank that gets a big thumbs down from us. The radio ad sounds promising:
• Access up to 40% at any time
• Great interest rate of up to 7.4%
However, you only get 7.4% on an investment of R5m or more that you are prepared to invest for at least 12 months (you would have to be crazy to do this)! For most of us the interest rate would be closer to 6% pa.
And while you can access up to 40% of your investment amount before the term expires, you will be penalised if you want to access more.
So why would you invest your money into an account with a low interest rate and a penalty to access your funds when you could be getting ±8% on a money market unit trust account with full access to your funds within 48 hours and no penalties?
Hardly a day goes by when we are not bombarded by some product provider pushing their latest, fanciest, cleverest product our way. It’s time that we stopped and answered the question – would we use it? If it’s not good enough for us to use then it’s not good enough for our clients to use either.
Standard Bank are currently advertising their Money market Select account which offers 7.35% on balances over R250k. If you have less than R250k you get 0%. That sucks…
There are fees on deposits (cash and cheque) as well as a monthly management fee but I cant find the figure on their site anywhere.
If you have cash that you want to put away for a few months then you should look at opening a money market unit trust fund – you can do this from as little as R2000 (lump sum) or R200 via debit order and you can expect to earn around 8% interest per annum with full access to your funds within 48 hours. And for the record, a money market unit trust account carries lower investment risk than a bank money market account as the money is held in trust!