Government retail bonds
What are government retail bonds?
, or RSA Retail Savings Bonds to give them their formal name, are bonds directed at the South African public.
By investing in these bonds you lend money to the South African government. In return for this loan, you’ll receive two interest payments a year until the bond matures.
So why should you consider investing in government retail bonds? Here are four advantages…
Advantage #1 of investing in government retail bonds: Low entry cost
You can invest in government retail bonds from just R1,000. This makes it more accessible than many fixed-term savings accounts, which require a larger deposit.
There are also no charges or commissions. This isn’t the case with many bank accounts or other investment vehicles.
Advantage #2 of investing in government retail bonds: Fixed interest rate
When you invest into government retail bonds, you know from the outset how much interest you’re going to earn for the term of the bond.
This makes it easy to see how your bond investment will grow and will help you to plan your finances.
Also the interest rate you receive is quite competitive compared with many savings accounts you can access via your bank.
Advantage #3 of investing in government retail bonds: Easy to buy
Unlike buying other types of bonds, buying government retail bonds is relatively easy.
You need to register, which you can do on the RSA Retail Savings Bonds website
, over the phone or at the National Treasury.
Once you register, you can buy bonds online, at the National Treasury, at the Post Office, at branches of Pick n Pay or over the phone.
Advantage #4 of investing in government retail bonds: Very low risk
Government retail bonds are an extremely low risk product. The risk you take on is that the government won’t pay you back your initial investment amount or interest payments.
The chance of this happening is very low.
So there you have it. Why you should consider investing in government retail bonds.
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