Best Place To Keep Your Emergency Fund In South Africa
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- čas přidán 23. 07. 2024
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Having an emergency fund in place is one of the most important things when it comes to creating wealth, we all know that, right? But do you really know where you need to keep your emergency fund? It is not as simple as you might think!
As you know me, I always try to optimize every aspect of my investment strategy. So, today, we are going to explore all the different options of where you can store your emergency fund in South Africa, and then I will tell you what my best strategy is.
00:00 Introduction
00:36 What is an emergency fund and why do you need one?
02:07 Important Aspects of an Emergency Fund
04:22 Options for keeping an Emergency Fund
09:32 Best strategy for an Emergency Fund in South Africa
Here are the links to the websites mentioned in this video:
Tymebank: www.tymebank.co.za/save-earn/...
Best Fixed Deposit Rates in SA: www.ratecompare.co.za/
Allan Gray Money Market Fund: www.allangray.co.za/fund-page...
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My name is Dr. Pieter Marx de Villiers, and I'm a Veterinarian turned Financial Advisor from South Africa who aims to retire by the age of 35. Follow me in my journey towards Financial Freedom in (hopefully) just 10 years! :)
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Interesting strategy. I prefer to keep it simple. Savings account with bank for easy access. 3-6 months expenses. I view the emergency fund as insurance and not an investment. Once emergency fund is topped up then move on to investments. Also once you have a fully funded emergency fund then you can call your insurance company and adjust for a lower premium with higher excess, because you now have the ability to handle the excess or just pay for whatever it is with cash.
Hey Rodwan. Excellent tip on the insurance excess! That will likely save you lot of money over the long term. Jah for sure, keeping it simple is also a great strategy. Luckily now that the repo rate has increased bank savings accounts do offer much more attractive rates than a year ago, so they are still much better options that putting cold hard cash under the bed :)
Your content is priceless man. I wonder why CZcams took so long to suggest your videos to me 😭😭😂😂😂❤
Strategy: for many years (~30 years) used my homeland “access” bonds. They were used for cash flow smoothly (e.g. periodic school fees, Xmas madness, car maintenance) as much as emergency funds. Always increases bond repayments, never decreased, regardless of interest rates or outstanding balance).
Last 5 years: Two Standard Bank Money Market Select accounts. One in my name for cash flow smoothing. One in my wife’s name for true emergency (such as my death).
Was wondering about this and here you are! Watching 8 March 2024.
Love your videos, very informative and straightforward.
Thanks Lindokuhle. I really appreciate it :)
Info was very helpful. Shot bro
I've been praying for this hey.
My emergency fund is currently in African Bank. Their savings pocket offers a 4% interest rate. Though I will likely now only keep a month's expenses worth in there. Tyme Bank sounds like the best place to keep the bulk of it
Jah 4% is not bad, but at this stage Tymebank has the best offering out of all the banks in SA
Lekka one, I recently opened a tyme bank account just to check things out, cant wait for your video on this.
Thanks Sidney. I've used their Goalsave accounts for almost a year now and am actually very impressed with their services. Will definitely make a review in the near future. :)
Thank you for a very insightful video Pieter. Very informative and straight to the point. We don't have many videos of such content in South Africa. Mostly are in the US. Thanks again
Thank you for your advice, I appreciate it.
You are so welcome!
so glad i found you guys ..dankie vir wat julle deel dit is so veel meer werd as wat julle dink..thank you so much
Hey Michelle. Baie dankie! Ek is bly jy kry waarde uit die videos. :)
@@MoneyMarx dankie dat julle die kennis deel...werk stadig deur..tax stuff is so new to me our accountant dropped us and on a journey to get stuff in order..it starts small..making every step count
I'm using Tyme Bank and Home Loan Savings Account.
That is also a good strategy Archie 💪
I am using the yellow bank and getting the 6%* interest, I deposit extra money into my bond at the green bank where the interest rate is at 6.75%* and I have some money in the Savings Pocket with the other green bank. I think I should move my Savings Pocket money to one of the Money Market accounts.
That sounds like a healthy diversified emergency fund. Well done!
Hi! I am so grateful to have come across your channel. I have been struggling to manage my funds and don't believe I am making good choices due to lack of know how. Is there by any chance a private platform where I could ask your advice?
You have a new subscriber🙂🎊
Hey Theresa. I am so glad to hear that! I am not qualified to offer professional advice, but you are always welcome to ask questions here in the comments and I can answer them the best I can or create a video about it if it is an interesting topic to discuss :)
Valuable information here, thank you. I love the clear and simple on screen comparisons. I'm a visual learner😊
Glad to hear! I am experimenting with different presenting styles, and I agree, it makes it easier to keep the points organised and to deliver the message in a more concise manner. :)
Great video Pieter
Thanks Patrick! :)
How do I get access to the Alan Gray money market fund account? Google search? Is there a minimum monthly amount or is it flexible. Thanks
Cute girls Money Marx. ❤....love it here so much.
Thanks, good options. I like the New Funds Government bonds ETF on Easy Equities, as it gives flexibility, low volatility and good returns.
Am also thinking of crypto stable coins that offer high interest rates of about 6%
Hey Brett. Those are also two great options! Bonds are a bit riskier than cash instruments, so you have a small risk of losing capital during times of low interest rates, but it can act as a great security or opportunity fund! The Stable coins are also an interesting option, but I haven't researched them enough to be able to recommend them, but definitely something I will look into!
Awesome, dankie vir vid. Vandag my tymebank account oop gemaak. As jy tyd het vir 'n video dedicated aan tyne Sal dit great wees
Plesier Heinz. Lekker man! Sover is ek baie tevrede met Tyme, so ek sal dit enige tyd aanbeveel. Sal definitief werk aan n review :)
What would your take be on using the access bond for emergency emergency funds?
That would also be a good idea as it will serve the same purpose of a bank account. I am just wary of only using an access bond, but if you combine it with a money market fund or Tymebank goal save accounts then you will diversify your risks, so that will also work well 😁
Namibia here
Namibia is in the house! :)
Great work👌
Thanks Mosa! :)
Great content ❤
So die rekeninge by TymeBank kan nie meer as 100k groei nie insluitend die rente. 100k is die cap, end of?
Bro, I thought you were in the banking industry, I didn't know you were a vet.
I've just been using a savings account, just not sure when to stop and diversify
A savings account checks most of the checklist boxes of an emergency fund, so it is a great place to start, but your money will lose some value due to low interest rates. So it will be a good idea to consider putting some of it with Tymebank or a money market fund, :)
u did not mention notice account
HI Money Marx. Absolute brilliant info. Just one question. Most of the info is when you have money. What is your advise to make extra money?
Thanks Cheslin! I am soon going to release a series of videos where I personally try out and review different online jobs to see which ones make the most money that you guys can use yourself as well, so make sure to stay tuned for that! :)
@@MoneyMarx Brilliant. Cant wait to see what you have for us. Love your channel and have already sent your link to family members to subscribe😎
@@cheslinplaatjies762 Thanks Cheslin I really appreciate that! :)
Consider transcribing as an extra income option. Slow in the beginning but ramps up to good steady income
You forgot sofa cushions 😁😁😁
On a lighter note!! 😅😅😅
Hi Pieter. Thanks for the video. You didn’t discuss the difference between money market fund/unit trust vs money market account (banking product). Are money market accounts via bank safer regarding guaranteeing capital?
The blue bank has a money market account at 4 % interest, with 100 000 minimum.
I think it’s 100 000 minimum. Sorry i might be wrong regarding the minimum
Hey DeeCarli. A Money Market Account is basically the same as a normal bank savings account, whereas a Money Market Fund is more like a unit trust where your money is invested in various cash instruments. So a money market account would be safer with regards to guaranteed capital yes. The R100k minimum is quite steep for most people, and 4% is below our current inflation rate, so I'd personally rather go for Tymebank in that case. :)
My emergency fund is in my access bond. Saves quite a few bucks on interest and the money is easily accessible.
Jah it can make quite the difference over the long term if you can cut down on the interest you pay. I just like to diversify my emergency fund a little bit in case of the small risk that the bank decides for some reason not to advance a large amount of money at one time from the bond
Could they do that? I put quite a chunk of extra money in every month, so that would not be ideal. Whatever I take out (when needed) is from the advance payments I deposit. Will have to look into this.
@@xenithkruger8378 If it is from the access bond then it is unlikely that they would, but in the end, it is their loan that they issue to you, so they have full control over it. They can become suspicious if you take out a large amount of money and then ask you to do another affordability exercise, which, if your emergency is due to job loss, could put your home loan in trouble. Again, unlikely to happen, but I just like to play it safe by utilising one of the other products as well. But an access bond can still serve as an excellent security fund, I would personally just not rely 100% on just one type of product.
Which bank gives you an access bond that allows you to draw a huge chunk of money from it?
Hi Pieter, I'm so greatful to follow you , I had no idea on how to manage my fiance, I want to start saving for emergency fund, do you think it's wise for me to start saving R1000 every month with African Bank?
Hey Sindisiwe. Thats awesome to hear! I think African bank is a good option, as long as they offer a competitive rate and you have quick access to your funds, which is important for an emergency fund
Still watching this one, but did you see that the big change to global investment allowances? Got an email from Sygnia today talking about how it's going to affect some of their funds. This could be a great topic to cover. :)
Edit: My strategy has been 3-6 months Money Market with AG. It's fine but I hate just being on par with inflation. Eww! :P
Jah I saw that they will increase the offshore allocation to 35% within Regulation 28, which is great for RA's and will motivate more people to consider them. That is a good idea for a video, I just want to give it a bit more time to see how the different investment providers will act upon it. But I'm glad Sygnia is embracing it, seeing that I moved my RA to them 😅
Jah inflation has been brutal in the past in South Africa and America is currently feeling its full wrath haha! But at least you are not losing money, which is important for the purpose of an emergency fund
@@MoneyMarx Yup I started with Sygnia the same time you released the stats on the fees and return. Not gonna look back.
How easy is it to access funds from the AG money market? Is there an app? How does it work?
@@DeeCarli It's dead easy. They have a website you can make withdrawls from. MM accounts usually withdraw 2-4 days from request. I had a larger stake in AG until I realised my other investments were being eaten alive by fees. #schoolfees
Put in 🤣🤣🤣
;)