You might have missed the ‘saving for the festive’ boat this year but you are never too late to start saving for the upcoming year. The sooner you start saving, 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. 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 usually has no-risk, as you earn interest on the money you save, and your initial capital is guaranteed.
With this type of account, you have access to your funds either immediately, or within an agreed timeframe, in case you need to withdraw the money for a specific purpose. A lot of people use this type of account to save for family holidays or to take their families for a festive season shopping spree.
A PureSave account is a form of a savings account that allows one to put some money away for a rainy day. With this type of account, interest is paid on even the smallest balance. It takes as little as R50 to open the account and you can add or withdraw any amount whenever you like.
The pros and cons of a savings account
A savings account offers you easy access to your money.
A notice deposit protects your savings from impulsive withdrawals as you are required to provide notice of your intention to withdraw cash.
A fixed deposit is a type of savings 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 withdrawals on a whim.
While you may not enjoy the same levels of interest as say an investment account, you have the peace of mind of knowing your capital amount is secure, and how much interest your money will earn.
Interest rates on savings accounts are lower on more high-risk investments.
Easy access to your funds may lead to spending your savings on impulse buys.
The savings period is usually short and therefore not enough capital is built for serious emergencies such as an unexpected family funeral or car maintenance payments.
Find out upfront how much interest you will earn on your savings and then decide which account is right for you!