/ 23 April 2010

Capitec for emergency savings

I want to invest in a money-market account as an “emergency fund” so I want ease of access to the funds. I already have long term investments but no short-term nest egg. I am prepared to pay R500 a month, writes Lesiba

Maya replies: Capitec’s rates beat any other bank hands down. For any amount under R10 000 they are paying 7% and the money is available on the same day. Most banks work the opposite way, with low amounts attracting very little interest and most money-market accounts need minimum balances of about R10 000.

For larger amounts it really is worth shopping around for rates. Just with my own bank I discovered by accident that they had introduced a new money-market account which paid 1% more than I was getting on my existing money-market fund. The only difference is that you cannot access your deposit for the first 14 days, but thereafter it is available on 24 hours notice. I can certainly live with that short term inflexibility for the better rate.

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