A bank account is generally the safest place to keep your cash, but that’s no reason to settle for mediocre performance.
After all, your bank isn’t doing you a favour by holding onto your money. Banks use customers’ deposits to lend out cash at a high interest rates, earning a profit on the margin.
That’s not a bad deal. In turn, banks invest offering depositors convenience, security and innovative ways to manage their cash.
But it also means that it’s only fair to demand a little more from our banks. After all, banking is highly lucrative, but without deposits, they’d have no business. They need us more than we need them.
As it turns out, the interest you can earn by depositing your cash in South African banks are really solid by global standards.
Optimising your bank account
However, South Africans consistently fail to get the maximum benefit from our banking sector. There are two reasons for this. First, choosing the optimum account seems complicated, and not many of us realise that simply by consolidating our savings in a high-performance account, we can get much better returns on our savings.
How much better? Consider this simple calculation: if you were to move your cash from a current account earning 3% interest into a fixed deposit earning 10%, you would effectively double your wealth over ten years. That’s an extraordinary gain simply by switching bank accounts (without incurring additional risk).
Many people are wary of high-interest accounts because they don’t want to lock their cash away for a long period of time. For this reason, it’s worth bearing in mind that you can often get excellent returns simply by moving your cash into a premier account with a larger minimum balance. For example, if you have R100 000 or more, you will likely be eligible for many extremely competitive bank accounts that offer high interest and instant access to your cash.
In other words, by consolidating your current and savings account, many people are in a position to get much better returns.
Making the industry more transparent
The second reason we don’t always get the best returns on our cash is that the banking industry is not very transparent about interest rates.
Banks are always advertising their new mobile apps and showing off redesigned logos. But ultimately, the most important consideration is how any given bank will maximise our wealth.
The problem is that there are thousands of bank accounts available from a vast array of banks. Manually sorting through all the available products is effectively impossible.
That’s why My Treasury designed the Savings Optimiser. The Optimiser turns a really complicated calculation, that previously involved a lot of guesswork, into something really simple.
This is how it works: users input their savings preferences. How much do you have the invest? (Remember, the more you can save in any one account, the better returns you are likely to be eligible for.) How quickly do you want to access your cash? How old are you? (You may get a preferential rate if you’re over a certain age.) And voila, the Optimiser instantly tell shows you which bank account offers the best returns, so you can get earn much more from your savings.
It’s good for ordinary depositors, like you and me. But it’s also good for the industry, making banking in South Africa more open, transparent and competitive.
Stop losing out on low-performance bank accounts. Use the My Treasury Optimiser now to learn how to grow your wealth. Because there’s a much wiser way to save.