RSA Retail Bonds are an option for those seeking that little extra interest from their strained savings. Effectively, you lending the government money on a short term basis of 2,3 and 5 year options where the interest is fixed and you are guaranteed your money back at the end of the term that you choose.
The Reserve Bank held the repo rate this week at 6,50% which gives South Africans a breathing space in the face of rising inflation as a result of the rising cost of fuel and a weakening rand. The change in interest rates affects the rates that the RSA Retail Bonds offer. If you expect the rates to rise in the short term, it stand s to reason that you should choose a shorter term option.
So the focus is on interest rates. If you owe on debt then you have a reprisal. If you have an interest bearing investment then you will have to wait a while for another review on the rates.
RSA Retail Bonds are very competitive
The rates currently on offer are higher than the rates offered by the money market. Probably around 1% more.
| 2 Year Fixed Rate | 8.25% |
| 3 Year Fixed Rate | 8.50% |
| 5 Year Fixed Rate | 9.00% |
So where can you invest in a RSA Retail Bond?
Payments can be through the following means:
•Any branch of the South African Post Office;
•Internet Banking; •Direct deposit at ABSA, Nedbank, First National Bank or Standard Bank
Pensioners can have the interest paid on a monthly basis which is a pretty competitive when compared to prevailing rates in other investments.