African Bank 1 Year Fixed Deposit
They say it takes money to make money. We say it doesn’t have to. That’s why all it takes to earn South Africa’s best investment rate is R500. Because we understand that big dreams don’t need big stars. So, stop searching and start growing. Open an account in 3 minutes.
What is a fixed deposit investment account?
A fixed deposit investment is a type of bank account into which you deposit your money for a set period in return for guaranteed growth. This means that you can’t access your money for the duration of the chosen period. The duration that you invest will determine your fixed interest rate.
How do fixed deposit investment accounts work?
When investing with a fixed deposit investment, you have the option to choose a fixed term ranging from 3 – 60 months. You then agree to not touch that money for the decided period of time. Each term length comes with a predetermined interest rate. The frequency at which you want the interest to be paid out — either monthly, semi-annually, annually or on expiry — will also influence the interest rate. Generally, the longer the fixed term, the higher the interest rate will be.
What is the difference between a fixed deposit and other investment accounts?
There are various types of investment accounts to choose from, like a notice-deposit account and other long-term investment accounts.
A notice-deposit account allows you to simply give notice that you need the money, for example, 30 days’ notice. With a fixed deposit account, you agree to a fixed term up-front and then leave your money for the full term. The fixed deposit interest rates are usually worth the inconvenience as they are higher than ordinary savings accounts and there is absolutely no risk of losing your capital.
Other types of long-term investments, like Unit Trusts or a Retirement Annuity, can often lose capital over a short period. However, they will ultimately grow the longer you have it. There’s no month-to-month guarantee on such investments and withdrawing your money at the wrong time could cost you.
Who qualifies for a fixed deposit investment account?
Anyone who has a valid identity document or passport, as well as the minimum deposit amount of R500.
Why should you apply for a fixed deposit investment account?
If you’re looking at a short-to-medium term investment (5 years or less) and like the sound of guaranteed growth or the best return on investment with no risk, then a fixed deposit may be just the investment option for you!
When is a fixed deposit a good idea?
If you’ve got any savings that you only need to use in a few months’ time, you should certainly consider investing with a fixed deposit. You can decide on the period that best suits you, from 3 months up to 5 years.
This works really well if you’re saving for a particular event that will only happen in a few months/years, like buying a house or paying for your kids’ university fees. If you’ve already saved up a portion that you’ll need, you can easily put that money aside for a fixed time period. Besides the great interest that you’ll earn, your money will be out of your account and harder to access once temptation rears its shiny head.
Can I add money on fixed deposit?
No, this investment is for a fixed amount, at a fixed rate, for a fixed period. To work around your daily transfer limits, you have 7 days to complete your total opening deposit.
Can I withdraw part of a fixed deposit?
The longer you invest, the higher your return, so we don’t recommend withdrawing early – even if it’s only a part of your investment. You may request to withdraw your investment before the expiry date, but you may then incur an early withdrawal penalty.
As part of the process of approving or rejecting an application for an early withdrawal, African Bank requires you to follow the below procedures:
- Contact the African Bank customer contact centre on 0860 49 49 40.
- Supply reasons for the requested early withdrawal, as well as relevant original certificates supporting the reason, such as death or medical certificates.
What are the advantages of fixed deposits?
Fixed deposit accounts offer a low-risk investment. Unlike investing in the stock market or in unit trust funds, it is safe to invest in a fixed deposit as your interest returns are guaranteed.
They also generally offer higher interest rates than other types of regular day-to-day savings accounts. With African Bank, you earn the best fixed deposit rates in South Africa 2020 — 10.01% per annum — which is equivalent to 12.22% per annum calculated on expiry after 60 months.
Simply put, a fixed deposit is great for any short-term investment where you simply cannot risk losing any capital.
What are the disadvantages of a fixed deposit account?
As attractive as they can be, fixed deposits may not necessarily be suitable for everyone. One of the main disadvantages is that there is no flexibility with accessing your funds. If you need to withdraw your funds before the agreed-upon date, you will have to substantiate your reasons and pay a fee.
While an advantage is that they are low risk, it also means that they have lower returns compared to other, riskier, investment options (e.g. property, shares, bonds, etc.).
How do I open a fixed deposit account?
Opening a Fixed Deposit account with African Bank is easy. You can apply online within 3 minutes, or visit your nearest branch.
All you need is the following:
- Identity document or passport
- The minimum opening deposit of R500.00