As South Africa celebrates Savings Month this July, the nation’s resilience and adaptability in the face of economic challenges continue to shine through. Despite ongoing financial pressures, South Africans are demonstrating a strong desire to secure their financial futures through savings. This commitment to financial well-being was highlighted in the Nedbank Segment Tracker research conducted at the end of 2023, which revealed that while many consumers experience financial stress, they also express a keen interest in improving their financial situation.
The research provided valuable insights into saving behaviours across the country. Nearly all banked respondents in the survey reported having a basic savings account, debunking the myth that South Africans don’t value saving. However, the uptake of more structured, long-term savings and investment products was notably lower, with just 46% having notice accounts and 42% owning fixed deposits. Even fewer respondents – only 18% – reported having a retirement annuity or provident fund, while 21% held unit trusts.
These findings suggest that while there’s a widespread understanding of the importance of saving, many South Africans face difficulties in transitioning from basic savings to more comprehensive, long-term financial planning. This gap presents both a challenge and an opportunity for financial institutions to support consumers in their savings journey.
Vanesha Palani, Executive: Financial Management at Nedbank, emphasises the importance of Savings Month in fostering a culture of financial prudence. “Our research shows that South Africans do actually understand the value of saving,” she says, “but most need to be given the right tools and solutions to overcome the challenges they face when trying to establish and grow their saving habits.”
She argues that an incremental approach to building a savings habit is vital, and points out that simple and free savings accounts like the innovative MyPocket feature of the Nedbank MiGoals account are key to helping people take the first savings steps. “If you’re just starting your savings journey, or want to do so, our MiGoals account makes it possible for anyone to begin, even with as little as R1,” Palani explains.
Available at a low R5 monthly fee, MiGoals allows users to create up to 10 savings pockets, each earning up to 7.25% interest annually. With instant access to savings without notice periods or additional fees, MyPocket serves as an ideal first step towards more structured savings.
“Then, as savers grow more comfortable and consistent, they can progress to products like the Nedbank 32-Day Notice account or Nedbank JustInvest solution,” she explains. The 32-Day Notice account provides above-average interest rates that increase as the balance grows, starting from an accessible R250 opening deposit. This tiered interest structure incentivises consistent saving, turning small, regular contributions into significant growth over time.
For those ready to take their savings further, the JustInvest account allows customers to start with as little as R500 and earn competitive interest rates of up to 8.75% for the first three months. It offers the flexibility of additional deposits from just R100, making it easy for savers to build their nest egg gradually.
Both accounts address common concerns about fees and accessibility, with zero monthly fees and free stop orders from Nedbank accounts. The digital accessibility of these solutions allows for easy account management and 24/7 support, making the saving process as seamless as possible.
“This incremental approach to savings is the perfect way to help more South Africans build confidence and momentum in their savings journey,” Palani says. “As they experience success with short-term savings goals, they’re more likely to explore and commit to longer-term savings and then go on to investment options like retirement annuities and unit trusts.”
“This Savings Month, Nedbank encourages all South Africans to take the first step on their savings journey, wherever they may be starting from,” Palani urges. “Whether it’s opening a basic savings pocket, progressing to a notice account, or exploring long-term investment options, every step counts. Remember, the pathway to your financial freedom begins with that first rand you save, and Nedbank is here to support you every step of the way.”
