RSA Retail Bonds vs Fixed Deposits: Which one is best for you…
Walk into any conversation about safe income investing in South Africa and two names come up immediately: RSA Retail Bonds and fixed deposits. Both are widely regarded as safe. Both pay a fixed interest rate for a fixed term. Both are readily available to retail investors. Most people treat them as essentially interchangeable and pick whichever has the higher number on the day they invest.
That’s the wrong framework. Because once you look at what each product actually pays – after SARS takes its share, at different marginal tax rates, across different terms – the comparison produces results that most investors have never seen laid out clearly.
And there are specific investor profiles where the conventional choice is almost certainly costing money.
