You probably have good intentions to put a little money aside each month, but the reality is that many South Africans are not saving. If you're one of them, you may not have saved enough to splurge on gifts this festive season, but remember that there's always time to start the good habit of saving in the new year.
The sooner you start saving, advises Standard Bank, the more money you will have at the end of the savings term. "At its most basic, saving is the act of putting money away in a safe place with the intention of using it in the future," the bank says. "If you're trying to accumulate a smaller amount for a short-term goal, then a savings account is probably the way to go."
A savings account is usually a risk-free way to save because you earn interest and your initial capital is guaranteed.
These accounts enable you to have have access to your funds either immediately or within an agreed timeframe. According to Standard Bank, many people use this type of account to save for family holidays or festive season shopping sprees.
The advantages of a savings account are numerous, including:
- Easy access to your money.
- With a notice deposit account, you are protected from impulsive withdrawals because you are required to provide notice of your intention to withdraw funds.
- A fixed deposit account that lets you choose the period of investment, offers a fixed interest rate for the full period of the investment, and protects you from making unnecessary withdrawals.
- You have the peace of mind of knowing your capital and your interest earned are secure.
Standard Bank's PureSave account enables you to put money away for a rainy day. It takes as little as R50 to open the account and interest is paid on even the smallest of balances. You can deposit or withdraw money at any time.
Savings accounts do, however, have some disadvantages:
- Interest rates are lower when compared with interest you can earn on higher risk investments.
- Access to funds allows for impulsive spending.
- Because the savings period is short, not enough capital is accumulated for unexpected, expensive events like a family funeral.
Find out how much interest you will earn on your savings so you can decide which account is right for you!
Visit Standard Bank to find out about the different types of savings accounts.