Earn up to 11.5% interest on one of the safest investments around
Markets are toast and interest rates are plummeting.
Retirees and others who live off their investments are seeing their income dwindle fast.
The only way to keep income from their investments stable is to draw down a larger percentage, thereby eroding the capital.
The Money Show’s Bruce Whitfield asked personal finance expert Warren Ingram (Galileo Capital) what to do.
There are no easy solutions, warned Ingram.
You must try to balance the need to sustain your lifestyle with the need to preserve your money for as long as possible.
If you draw 10% or more from your investments you must reduce – not increase - the riskiness thereof, warned Ingram.
You can get more certainty regarding income/growth through bonds, fixed deposits and money markets while reducing your exposure to property and shares.
One good solution, reckons Ingram, is RSA Retail Savings Bonds.
Current interest rates:
11.5% per year for a five-year fixed deposit
9% per year for a three-year fixed deposit
7.75% for a two-year fixed deposit
If you are over 60 years old, you can opt for a pensioner’s bond where they will pay out the interest monthly.
If you are under 60, your interest will be paid out twice a year or capitalised.
You may access your funds before the end of the fixed term, but you will pay a penalty.
It is “very, very difficult” to beat an interest rate of 11.75% per year, said Ingram.
Older people get income tax exemptions on the interest they earn, making RSA Retail Saving Bonds very compelling.
For more detail, listen to the interview in the audio below.
Pent-up demand, excess supply and record low interest rates are fuelling the unforeseen recovery, says Siphamandla Mkhwanazi.Read More
The bank is one of only six in the world to be recognised in this way for outstanding performance during the global health crisis.Read More
Everything is done electronically – you never have to leave your home, says Mortgage Me’s Andrea Tucker.Read More
[EXPLAINED] The Money Show’s Bruce Whitfield interviews Craig Wilson, Editor at Stuff Magazine.Read More
Shoprite is exiting the oil-rich but spending-money-poor nation. Bruce Whitfield interviews Dianna Games (Africa At Work).Read More
The Money Show’s Bruce Whitfield interviews Natascha Viljoen, CEO at Amplats.Read More
It still argues that the lockdown, not the pandemic, is responsible for its clients’ losses. Bruce Whitfield interviews its CEO.Read More
As widely expected, Sarb Governor Lesetja Kganyago announced a repo rate cut of 25 basis points on Thursday.Read More
"Consumers who are in debt have received a huge bonanza," says Econometrix Chief Economist Dr Azar Jammine.Read More
"This case shows rogue officials at Sars that the courts protect taxpayers," says tax attorney Jean-Louis Nel (Tax Consulting SA).Read More