Background
National Treasury launched the RSA Retail Savings Bonds in 2004.
Two bonds are on offer, the existing fixed interest option and a new inflation linked bond that is protected against inflation.
To encourage households to start saving alongside business and government, the National Treasury developed a retail bond which offers guaranteed returns, can be bought for as little as R1 000 and carries no commission, agency or service fees.
The Retail Bond also allows investors to take control of their own savings portfolio instead of investing through a third party. The RSA Retail Bonds offer competitive rates, with similar benefits as Government is paying in the capital markets. Individuals will now have access to those benefits in the same way as businesses and corporations.
Retail Savings Bonds stimulate personal economic empowerment by providing an alternative investment instrument that is safe and secure while delivering solid and dependable returns as well as creating healthy competition between the investment instruments in the marketplace, to the ultimate benefit of the individual investor.
The simplicity and reliability of the RSA Retail Savings Bonds should lead, over time, to deeper levels of financial and economic literacy in South Africa as a whole. As such, South Africans across the economic strata will have the opportunity to become financially empowered, a development that in turn should stimulate a savings culture and encourage economic maturity.
- Main target of LSM groupings 6-8.
- Secondary targets include higher groupings of 9-10 and lower grouping of 4-5.
- Currently 60% of investors are over the age of 50 - more investors from the younger age groups will be targeted.
- Although ambitious the motto is “any South African with a R1 000 to save is part of the target market”.
- No fees, simple, secure, easily accessible and affordable
- Available to all RSA citizens and permanent residents with a valid ID number and RSA bank account
- Backed by the full faith of Government
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- Investors must be in possession of a bar coded SA ID document, a South African bank account (ensure FICA compliancy) and can be of any age (as long as guardian is present if under the age of 18).
- New investors must call the call centre for validation of their ID number. Current investors do not need to do this.
- After validation they must select a bond of their choice and go to any Pick ‘n Pay to pay and sign for it.
- Investors get a receipt. Official information highlighting the bond term, interest rate etc. are posted.
- Fixed Rate Retail Savings Bonds
- Rolling maturities of two years, three years and five years
- Offers fixed rate until maturity
- Investment amount R1 000 to R1 million
- Interest payment option – payments received semi-annually or monthly (monthly repayments for over-60s only)
- Option of reinvesting payments
- Inflation-linked retail savings bonds (introduced in 2007)
- Three-year, five-year and ten-year maturities
- Inflation protection for investors
- Bi-annual interest payment only
- Investment amount R1 000 to R1 million
As at 31 March 2008
- Total amount invested to date: R2.33 billion
- Number of Investors: 18 403
- Number of Investments: 27 783
- Average per investment: R 54 000
- Investors over 50 years: 60%
- Investments between 1 000 and 20 000: 67%
| Gross savings as percentage of GDP | 13.5% | Dec 2007 |
| National Savings Ratio | 14.1% | 2007 |
| Amount saved by South Africans (R millions) | R281 648 | 2007 |
| Foreign capital financing gross capital formation (*highest rate of dependency since 1970 – 26.1%) | 34.0% | 2007* |
| Corporate sector savings ratio | 9.9% | 2007 |
| Household sector savings ratio | 1.4% | 2007 |
| General government savings ratio | 2.9% | 2007 |
Helpline: 012 315 5888
Website: www.rsaretailbonds.gov.za
Address: National Treasury (240 Vermeulen Street, c\o Andries and Vermeulen Streets, 14th floor, Pretoria)
Website: www.rsaretailbonds.gov.za
Address: National Treasury (240 Vermeulen Street, c\o Andries and Vermeulen Streets, 14th floor, Pretoria)