Personal Finance | There is an upside to higher interest rates | City Press

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Personal Finance | While borrowers are struggling with the ever-increasing interest rates, the increases have been a bonus for savers who are getting better returns on their bank deposits. Are you a saver? What has your experience been?

Normally the longer the investment period, the higher the rate the bank is prepared to pay you to keep your money invested. Yet, for example, Nedbank is paying a nominal interest rate of 9.30% over 12 months but only 8.85% over 24 months.

Most banks offer customers over the age of 55 a better interest rate. This can be as much as 50 basis points more than the normal fixed deposit rate.For example, Absa offers additional scores to customers who maintain a balance of more than R5 000 and sign up for stop orders to deposit into their savings accounts.When it comes to advertised interest rates the bank is offering, it can be confusing, especially the actual interest rate being offered.

The interest is then either reinvested or transferred to your savings account. The annual effective rate is the interest rate compounded monthly over 12 months if you did not draw the interest out of the account each month.

 

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