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RSA RETAIL SAVINGS BONDS

April 17, 2024
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Considering Bonds as part of your portfolio?

 

WHAT IS A BOND?

When you buy a bond, you basically become the lender/bank. You are guaranteed interest income, and you are also guaranteed your capital back at the end of the investing period.

 

RSA Retail Savings Bonds are investments with the Government of South Africa which earn a variable, fixed or inflation linked interest for the term of the investment. There is no safer bond than a bond to the government.

 

RSA Retail Savings Bonds 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.

 

There are three different types of RSA Retail Savings Bonds on offer:

  • Fixed Rate RSA Retail Savings Bond
  • Inflation Linked RSA Retail Savings Bond
  • RSA Retail Savings Top-up Bond

 

FIXED RATE RSA RETAIL SAVINGS BOND

The Fixed Rate RSA Retail Savings Bond series consists of bonds with 2-year, 3-year and 5-year terms. Different interest rates apply to each of the maturities in the series. Interest due on each of the Fixed Rate RSA Retail Savings Bonds is paid into the designated bank account semi-annually on the interest payment dates, being the 31st of March and the 30th of September each year. Investors in Fixed Rate RSA Retail Savings Bonds may elect, on application, to receive their interest payments on a monthly basis.

 

Current fixed rates

  • 2-year 8.25%
  • 3-year 8.5%
  • 5-year 9.75%

 

Minimum investment is R1000.

 

INFLATION LINKED RSA RETAIL SAVINGS BOND

The Inflation Linked Retail Savings Bond series consists of bonds with either a 3-year, 5-year or 10-year maturity. Capital amounts invested in Inflation Linked Retail Savings Bonds are inflation adjusted over the term, and a fixed interest rate is payable every 6 months on the interest payment dates.

 

Your capital amount is adjusted for inflation, so you are guaranteed to beat inflation. If your capital is adjusted for inflation and you still earn interest, you are winning.

 

Current inflation-linked rates

  • 3-year 2.75%
  • 5-year 3.00%
  • 10-year 4.00%

 

Minimum investment is R1000.

 

RSA RETAIL SAVINGS TOP-UP BOND

The RSA Retail Savings Top Up Bond consists of a 3-year savings term.

 

The minimum initial capital amount that may be invested in the RSA Retail Savings Top Up Bonds is R500.00 and the minimum amount that the account may be topped up with at a time is R100.00 (one hundred rand). This may occur on a monthly basis or any time during the duration of the term. You dont have to top up monthly. You can do it anytime during the 3-year period.

 

Current top-up account rate

  • 3-year 8.75%

 

CRITICAL TO REMEMBER

Only South African citizens can apply for retail savings bonds.

 

Only use forms from https://secure.rsaretailbonds.gov.za/  This website is the National Treasurys website. Do not use any other websites please.

 

You need to apply to the National Treasury. Never deposit money without an application for the Fixed Rate or Inflation-linked accounts. If you do, the National Treasury will not know where to allocate the money to. You need an application number every time.

 

You cant sell your retail savings bond to someone else.

Deposits can be made:

  1. Online banking
  2. Physical bank deposit
  3. Post Office
  4. Directly at Treasury in Pretoria

 

Please use option 1 for safety reasons.

 

Early withdrawal is allowed. Check the terms on the website carefully for each of the three bonds. We do not want to disturb these low-risk passive income investments. This can obviously NOT be your emergency fund.

 

 

 


 


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