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    1. Post
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      Hendrik Brand

      Definitely, if you saved R200 every month for a few years it will add to a massive total. Especially if invested.

      Thanks for reading.

    2. ghk

      Hi Hendrik
      Thanks for this analysis.
      Quick question re move from Investec to Capitec/other bank for that matter:

      If you have a home loan, is that currently with Investec?
      Think somewhere in their home loan docs it states there is an additional monthly/annual/once-off admin charge (? – must go and dust off my Investec docs and look this up) if you have your mortgage with them but dont bank with them.

      If this is true, did you consider this monthly (if it is monthly?) charge in your analysis above if you decide to keep your home loan with Investec but switch to Capitec?
      (Knowing that Investec offers up to prime minus 1 is most cases, I assume you would want to keep your home loan with them.)

      I’m also considering making the move. Still under 30, so still paying the ‘reduced’ fees but time is running out and then it’s the big league bank charges which I want to avoid!

      Thanks

      1. Post
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        Hendrik Brand

        Hi Ghk,

        I was in the exact same position, so I can give you my figures. With Investec, I paid R535 and had no monthly admin fee on the home loan (prime minus 0.65%). When I moved, Investec started charging me an admin fee of R60 and my bank charges with Capitec averages R31. This month my interest on the account worked out to R95. So after making the switch, I pay -R4 effectively. That is a swing of R539. Well worth the effort.

        Thank you for reading.

        1. Khulekani

          Great article. Would’ve loved to have seen a mention of African Bank as they offer the best interest rate of 5.5% on their transactional account and just like TymeBank, they have no monthly fees.

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        2. CN

          Great Blog Hendrik.

          Would investec still provide a mortgage bond to clients that dont already have a current account with them. Their interest rates are generally better than other banks.

          I currently have a mortgage bond and current account from investec. My only concern with moving bank account to Capitec was that if a wanted to move house at a later stage and it would be difficult to get a mortgage bond with Investec? Or investec would potentially only offer a worse off interest rate? i’m not sure if that is worth not changing though.

          1. Post
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            Hendrik Brand

            Thank you so much CN,

            Like I mentioned, I did manage to keep my existing loan without the interest rate changing. I assume that you would be able to still get a loan there without an account, but even if you can’t, there are numerous other options where you can apply. Do you specifically want the next loan to be with Investec?

          2. Carel van Niekerk

            Agree with your response. Investec did seem much more reasonable at the time of getting the bond originally (ie their interest rate is very competitive). However I’m not sure that would be the case in the future. Also not worth paying fees now on the assumption I might need them in the future.

  1. Ghk

    Great, thanks for this. I’m still on the R295 monthly fee which should increase once I hit 30.
    I’ll go check whether my home loan docs also state the 60 bucks. And do the numbers to see where I end.

    Out of interest, referring to another blog post of yours how to save, asking bank for a lower interest rate on mortgage, did Investec ever give you a reduction?

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      Hendrik Brand

      Hey Shihaam,

      The easiest option would be to switch to Standard Bank’s pay-as-you-use account as mentioned above, which I suspect will already save you some money. If you really want the absolute cheapest option, I really like Capitec. Yes, it will be a bitch to move, but it is worth the effort.

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  5. Weaver Mosehla

    Hi Hendrik

    Thank you for the information, I am with African Bank and I am loving it. Close to Zero Bank Fees, No monthly fee. Thank you

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  6. Gult

    Hi, Mr Brand. I just came across your website on Google, and I must say it’s super informative.

    One question though – how do fixed deposits actually work in South Africa? Please include examples if you can. I am considering Capitec’s fixed deposits. Also, please include the taxation aspect i.e. do I pay from the payout on my own by let Sars know about it or does the bank take it and then pays it on my behalf? My income bracket is in the 10k per month range.

    I would like to invest 10k for 12 month’s but I was thinking of starting with 3k for 3 to 6 months to see how it worked in practice.

    Thank you.

    1. Post
      Author
      Hendrik Brand

      Hey Gult,

      If you invested R100 000 for 2 years in a fixed deposit at 10%, you will have R110 000 at the end of year one and then R121 000 at the end of year two. At this stage you can access the funds without paying a penalty.

      In year one you earned interest of R10 000 that you need to declare to SARS and in year two you earned R11 000 that you also need to declare. This is added to your taxable income and you pay tax on it. You do however get a tax exemption on the first R23 800, so in this example, you will not be paying any tax.

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