Should I Invest In Retail Savings Bonds?
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- Äas pĆidĂĄn 23. 07. 2024
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I know weâve talked a lot about Tax-free savings accounts and Retirement annuities on this channel, and although these are the best investment vehicles for the long term, some of you might be sitting there, thinking, Pieter, I know I need to save for retirement, but what if I just need a place where I can safely store my money, where it will grow above inflation, and where I can have access to it in the next 2 to 5 years for a car or house down payment, or perhaps my childâs tertiary education?
Introducing RSA Retail Savings Bonds. These okes are often overlooked, but they can be quite powerful when used correctly.
So, in todayâs video, we will take a deep dive into what exactly a Retail Savings Bond is, how they work, both their advantages and disadvantages and at the end, I will give you my opinion on when you should consider investing in them as well as what my best strategy would be when doing so.
CZcams Chapters
00:00 Introduction
01:14 What is a RSA Retail Savings Bond?
04:27 Fixed Rate Retail Savings Bond
05:13 Inflation-linked Retail Savings Bond
07:07 Advantages of a RSA Retail Savings Bond
08:28 Disadvantages of a RSA Retail Savings Bond
09:56 Is it really safe to invest in a RSA Retail Savings Bond?
12:38 Who should consider investing in a RSA Retail Savings Bond?
15:09 What is the best strategy for investing in a RSA Retail Savings Bond?
17:20 My Final Verdict on RSA Retail Savings Bonds
Here are the links I mentioned in this video:
The Bond Club: bondclub.co.za/
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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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Whilst I am a Registered Financial Advisor under the FSCA as of June 2023, the content on this CZcams Channel and all of my other Social Media Platforms are for Educational Purposes only and should not be taken for Financial Advice. You and only you are responsible for your financial decisions and must therefore conduct your own research and seek the advice of a licensed Financial Advisor where necessary.
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I was reading through a high school business studies textbook when I came across Retail Saving Bonds as confused as I was I went on CZcams to further understand what it really is, thatâs when I came across your channel and I have to say it has truly helped.
You just gained a subscriber, your content is very informative and beneficial especially for young people like me that are still learning and want to be financially smart.
I have being trying to understand th is you explained that very well tanx
i have top up bonds cos i dont have lumpsums but i make sure i invest something that will not give me more than 22800 cos of tax, when i pass 60 i will add more and obtain 33800 of interest
Any new video on the Top Up Retail bond?
Thanks
Thank you Pierre, good explanation I heard you well, thumbs upâ€
Thank you the explanation Iâve been looking for đđŸ the inflation linked all of a sudden doesnât seem so great
Thank you
Great video.
Dankie dankie dankie!!! Op 47 as 'n musikant het ek geen investments of besparings nie. Jy't my nou so uitgehelp, baie dankie!!! Gaan dadelik na die res van jou videos kyk.
You just took away my fear of having my hard earned cash lost to the installation of another "fire pool", thank you...
May God continue blessing you for educating us.
Hey, by chance have you made a video on the new on wether you can top up the bond that you created, you said you would on 15:55 if government creates the Retails savings top up bond
For both options currently, the 5 year rates are 10.50% for fixed and 4.75% for inflation linked bonds.. kinda impressive đ đ
How to do a payment on online banking
Nkandla ..... LoL. Oulike video Pieter.
Haha ek moet vir JZ so nou en dan uithaal, al is hy nie meer president nie đ
Wow was just scrolling and came upon the guy yoh bra you are super informative
That's awesome to hear Gurswin! :)
What are the Tax implications. Is it better than investing a fixed deposit account in a bank ?
Hey Adrian. Both bonds and fixed deposits will earn you interest, which will be taxed the exact same way
Love your content ,binge watching everyday ....đ
That's Awesome! Thank you so much! :)
Tx Pieter đ
Dis n plesier Pierre! :) Die nuwe rates op die RSA Retail bonds vir Julie is baie goed, so dalk n goeie tyd om een te gaan oopmaak
Thanks for the information, much appreciated. Do you perhaps know how to start a successful real estate business. Keep up the good videos.
Thanks Jonathan. To be honest, I haven't really researched real estate in South Africa yet, but it might be something I would consider doing in the future. :)
Thanks for the great info . How do I go about opening a fixed rate retail savings bond . The rate at the moment looks favourable.
Hey Michael. You can just visit the RSA Retail Savings Bond website and follow the instructions on how to open one :)
Thank you đ
You're welcome :)
Excellent content and very well presented!
Thanks Harold! Much appreciated! :)
Hi Pieter great vodeo very helpful I'm just wondering where can I apply for these bonds is it at the local post office and can I open it for myself and my 2 children who are minors
Hey Mizpah. I believe you can open them at the Post Office or just online by visiting their website. You should also be able to open them for your children in their names
Thank u so much I'll do that.. Another thing if I may ask do u know anything about the bule tsela shares of old mutual that can be bought by the public any information will be helpful thanks
Discovered your channel yesterday and Iâm sold! Well done.
Thanks Kyanyisile. Welcome to the family! :)
Can parents or grandparents invest in these for their children/grandchildren, and utilise the childâs tax limits rather than their own?
Hi Gary. It is my understanding that section 7 (Income Tax Act) shouldn't apply in so far as grandparents donations/invests in favour of their grandchildren, therefore, income (and subsequent tax consequences) will be the child's. However, donation(s), settlement(s) or other dispositions by a parent for their minor child/step-child is deemed to be the income of the parent.
This is not financial advice, please do consult a tax practitioner or other relevant professional.
How do you restart your investment after 12 month if neede
Love you're channel
Welcome to the family Nonjabulo! :)
Well explained in simple terms. I appreciate your video.
Thanks John. It's only a pleasure :)
Thanx Pieter. When can we expect your video regarding the top-up platform.
Hey Salvin. I spoke about it in my video on Best Ways to invest for your child in South Africa, so you can go check it out if you're interested. :)
Hi Pieter is it possible that a non SA can RSA retail savings bond? Thanks for your response in advance.
hello,can you please help us to do it online.đđ»
Hey William. I believe the sign up process is rather straightforward. Just visit the RSA Retail Savings bond website (secure.rsaretailbonds.gov.za/Home.aspx) and apply online
@@MoneyMarx thanks.
The 5 year CDS (insurance against default) imply a default risk of 5 23%. The risk of our government bonds is higher than Russia bonds. This is why returns is so good. RSA retail bonds a bit different to normal government bonds and is likely less risky as the ANC do not want to default on it voters but rather default on international investors and SA bank.
That's a good point Jannie! Bonds still carry risk, albeit to a much lesser extent than shares and property. But for our government to default on its debt the country would really have to go downhill. What is your opinion on this possibility? Do you think our economy would decay to such an extent that the government would default in the next decade or two?
Stop smoking your socks
Love from Namibia
Welcome Namibia! :)
As at 1st April, they introduced the Top Up Bond. This one is awesome, fixed to 3 years at 8.75% rate.
Yup the top up bond is an excellent option for mid investments :)
Do you know how often they compound the interest earned on the fixed rate retail savings bond? If I use the calculator and select interest to be paid out every 6 months, it appears to be simple interest paid and not compound interest.
Hey CB. It really depends on which option you decide to take out. With fixed rate bonds, you can either have the interest paid put monthly, yearly or at the end of the term. You can also choose to not have the interest paid out and rather for it to be reinvested. You can check on their website or contact them directly to double check, but as far as I understand, if you elect to have the interest reinvested, they will compound it monthly.
Pieter plz tell me .if I invest R300k for 2years,can I contribute every month say 1k .if I decide to leave it there and go for 3 year .how does it work boss
Hey man. It depends what product you invest in. With Fixed and Inflation linked bonds you can only invest a lump sum once and then need to leave it for the term, but with Top Up bonds you can invest every month.
9:56 I think it was Simon Brown who said about the safety of Retail Savings Bonds: Buying RSB's is probably the safest investment you can make because you're basically lending money to the only "company" that can LEGALLY just print money to pay you back
Yup exactly! I was actually pleasantly surprised to see how great these products are for retirement!
Hi Pieter, what type of tax is paid when investing in bonds (interest gained)? Plus the percentage.
Hey. Bonds work similar to cash investments in that the interest (or coupon payments) that you receive will be added to your annual income and taxed as interest tax according to your marginal tax rate. But just like cash investments, you will receive an annual interest tax exemption of R 23 800 if you are under the age of 65. :)
My question is are Namibians allowed to invest in the RSA retail savings bonds?
I would also like to find out or can our Government also not do something like this for us.
As far as I know only South Africans can use RSA Retail Savings bonds.
Can you make a video on all the fees on easy equities, especially when you make your final withdrawal and what will be the damages when the fund finally reaches your bank account
I made a video where I explain all the fees one will have to pay in general on investments, but I am planning on making a full review of EE where I can touch on a the different fees. That is a good suggestion, thanks!
Great video! What are the tax implications regarding fixed rate bonds?
Inflation will Always go up XD XD
It will probably go up in the next couple of months/years, but it can also come down. It really depends on the economy and what is happening in the world.
@@MoneyMarx correct me if I'm wrong. Inflation is the buying power of said currency, right. Soo since the god knows when, inflation has been on a constant up rise?
I'd deffo bet for the rise on inflation long term. As u you 3-5 years is golden