At My Treasury, we’re adamant that your cash should always be working hard for you in a high interest account, no matter who you are. But if you’re over 60, putting your cash in a high interest savings accounts becomes especially attractive. The good news is that over 60s also get preferential rates – making sensible cash management even sweeter.
As you get older, your approach to investment risk is likely to change. Higher-risk investments like equities are usually expected to produce better returns over time, but the volatility of these markets can be a problem if you need medium-term stability. The last thing you want is to retire and see a sharp drop in the value of your nest egg because of a temporary dip in the markets.
High interest savings accounts offer a good middle ground between current accounts offering negligible returns and high-performing but unpredictable investments.
To appreciate the attractiveness of a high interest savings account, consider the following back-of-the-envelope calculation: if you moved your cash from a current account that earns you 3% interest to a high interest savings account offering returns of 10%, you’d effectively double your wealth over ten years.
That calculation reveals a remarkable fact: it is possible to prioritise stability and still see real growth.
Of course, that doesn’t mean you should cash out your portfolio and throw all your assets in a high interest cash account the day you turn 60. Personal asset allocation is a complex business, which requires taking into account a number of factors. That’s why a good financial advisor is so valuable.
But it does mean you should look to maximise the value of your cash savings by securing the highest possible interest rate that suits your personal requirements.
That’s all very well in theory, but how do I actually get high returns?
It’s easier than you think.
First, be over 60. Many banks over savers over 60 a preferential rate, so you can earn that much more.
Second, the more you invest, the better the potential returns. Many of the best performing high interest savings accounts require relatively large deposits. If you have R100 000 or more to invest and you’re looking to maximise your returns, you’re eligible for a range of select high interest products.
Third, consider a longer notice period. Generally speaking, the longer you lock your cash away, the higher the interest you can earn on your savings. You need to be practical: don’t opt for a 12-month fixed deposit if you need to use the cash to pay bills. But if you don’t need immediate access to your money, you could earn more interest with a longer notice period.
But how do I know where to put my money?
The My Treasury Savings Optimiser was designed to make an opaque and complex savings market transparent and easy to navigate.
Simply enter your savings requirements, including how much you have to save and how quickly you want access to your cash, and the Optimiser will find you the relevant high interest savings account that offers the best returns.
It’s free to use and will help you to put your money to work much more effectively in seconds.
Say no to lazy money. Put your hard-earned cash to better use now.