S.Africans urged to save for future - CNBC Africa

S.Africans urged to save for future


by Trust Matsilele 0

South Africans are urged to save for the future. PHOTO: PicknPay

Eastablished over 10 years ago, this offering was modelled to help ordinary people save for times when they will not be able to work or help their loved ones.

(WATCH VIDEO: Retail bonds and its role in SA fiscal strength)

According to the South African Savings Institute (SASI), citizens are struggling to save due to consumer behaviour and a number of measures that are missing that need to be adopted to develop a savings culture in this country.

“We want to encourage people to save for their retirements, rainy days and education for their children,” Johan Krynauw, director of debt operations, asset and liability management, National Treasury told CNBC Africa.

“We currently have three products which are two year, three year and five year investments with different interest rates but later this year we will introduce a new top up bond,” he added.


According to the National Treasury, Retail Savings Bonds (RSB) have been designed to be as accessible as possible for the general public to invest their money, while earning secured and market related returns on their investments.

Two different types of RSA RSB are on offer, the RSA Fixed Rate RSB, and the RSA Inflation Linked RSB.

Fixed Rate RSB earn a market-related fixed interest rate, which is priced off the current government bond yield curve and is payable on the interest payment dates until maturity.

(WATCH VIDEO: RSA retail savings bonds- Part 1)

Different interest rates apply to each of the maturities in the series.

“Investors in Fixed Rate RSB who are 60 years and older can elect, on application, to receive their interest payments on a monthly basis,” added Krynauw.

Capital amounts invested in Inflation Linked RSB are inflation adjusted over the term, and a floating interest rate is payable every 6 months on the interest payment dates.

The National Treasury employs these bonds to finance budget shortfall.

“We finance the budget deficit through the bond market by issuing government bonds in foreign capital markets and money markets,” posited Krynauw.