Whether saving for emergencies, retirement or ticking off experiences on your bucket list, saving is good for your financial wellbeing. But it isn’t always easy. Set yourself up for success by choosing a bank account that’s tailored to help you succeed.
You’ve set the plan in motion to save and you’ve set your savings goal. Now you need to decide where to keep your money.
Choosing the right account can help your savings grow faster
To get into a regular savings habit, it is highly recommended to keep your money in a dedicated savings account separate from your transactional bank account. It helps you to stay disciplined for longer because you see the money as separate, not extra. And your savings account should give you something in return, such as higher interest rates, other rewards, tax benefits or time horizon flexibility.
What are your savings account options and what’s in it for you?
When choosing from the many different types of savings accounts available, take into account how quickly you want to access your money, how much interest you want to earn, whether you can compromise on quick access to earn more interest, and then also the amount you have available to put into the account now.
To illustrate these points, here are some examples of Discovery Bank savings accounts:
- Demand Savings Account: This Discovery Bank savings account offers immediate access to your savings, while earning as much as 4.75% interest – compared to the industry average of 2.37% you’ll most likely get elsewhere. It is ideal for short-term savings goals like money needed for household or car repairs, or other unexpected costs.
- Notice Savings Account: This is an ideal option if you want to save for the wedding of your dreams, the birthday party of a lifetime or to visit a far off destination. With this account, you can only access your money after a specific notice period of, for example, 24 hours or 32 days, making the account perfect for exercising self-control. And because of this, you earn more interest, up to 5.25%. These accounts are typically great for saving for bigger purchases or for medium-term savings goals.
- Tax-free Notice Savings Account: Saving for a car or a deposit on a house? This account lets you take advantage of the annual tax-free savings allowance. It offers up to 6.25% interest on a minimum amount of R1 000 and you can choose how much you want to save each month with a notice period of 32 days to access the money. You can also use this account to add to the funds you want to set aside for retirement. However, there are limits to these account – you can only save a set amount a year (R36 000 in 2021) and a total of R500 000 in this account over your lifetime. However, for the tax benefits and high interest rates, it’s definitely worth considering.
- Fixed Deposit Savings Account: Saving for retirement is something to start as soon as you earn a salary. These accounts give you higher interest rates for the lump sum savings you want to save conservatively and not have exposed to the market. For example, when you have a lump sum of R10 000 or more, this account will add up to 7.55% interest monthly or for a fixed period. You can choose to save your money for three to 24 months. With higher interest rates, you’ll be able to boost your emergency or retirement savings over a fairly short period. There are many alternatives to save for retirement and a financial adviser can also give you guidance on annuities and long-term investments.
Discovery Bank’s savings accounts, when combined with other services, attract no monthly banking fees. This means every rand you save can go towards building your savings. You can compare all the accounts and their benefits. And, when you make the choice to save and manage your money well, it comes with additional Vitality Money rewards, like Dynamic Interest Rates, based on your Vitality Money status.
Are you getting the right support from the account you use to save your money? Take some time to consider your goal and the time needed to reach that goal. If you have a 12-month, two-year or 20-year savings goal, choose the account that will give you the best growth while keeping your money safe for when you need it. Consider having more than one savings account to make it easier to track your different goals and stay focused over the short, medium and long term.
This article is meant only as information and should not be taken as financial advice. For tailored financial advice, please contact your financial adviser.
Whatever your future goals, Discovery Bank has the perfect savings account for you, and the tools to understand the financial behaviours that help you manage your money well. Explore our wide range of savings accounts to build your savings profile and earn rewards for managing your money well with Vitality Money.
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