Radtastic investment funds and savings accounts (South Africa)

Howzit tjommas. This is the SA version of this page. The UK version is here.

Friends, there are a lot of different accounts and funds out there, and I’m not listing every single one of them here. These are just some of the funds that I’ve personally scouted out as potential candidates for my own portfolio.

(Psst: if you do want a pretty comprehensive list of funds in South Africa, try this link.)

I like to choose things that:

• Have the lowest possible costs (look for the “total expense ratio” or “total investment cost”) - this almost always means passive index investing. You should read chapter 7 of the book for the full debate on active vs. passive funds and make up your own mind about this.
• Are with reputable, legit companies that won’t vanish with my money.
• Are friendly for people who like to handle their investments themselves, online because, come on, it’s 2019.

Of course, you need to choose the right type of fund, with the right asset allocation, for your time period, which will tell you what your risk appetite should be. The basic rule for this is that the sooner you want to spend that chunk of money, the lower the risk rating you’re looking for.

New funds come out all the time! And I’m also not a wizard, so I might have missed some really great options. If you’ve found a fund that you think is hella-mega-cool, let me know about it so that we can keep building this list together.

Last updated: 14 October 2019

Heyyyyyyy… remember how I’m not a professional, qualified financial adviser? Just reminding you of that fact. Do your own homework before you put your money in something and talk to an actual financial adviser if you need to. Kthnxbai.

Looking for a cheap bank account?

Moneyweb ran a pretty good comparison of the different bank account options and their pricing. The result? Depending on your banking behaviour, the cheapest bank is either Capitec or (believe it or not) Old Mutual.

New challenger bank Tymebank is great, but they have some weird account limits that mean they’re not right for people who are likely to have significant cash coming into their account.

(Thanks to John Nel for pointing me to this link!)

Looking for a savings account for your emergency fund or table flip fund?

It’s hard to compare apples with apples here, because different accounts have different minimum deposits and notice periods.

Right now, Tymebank offers the best interest on day-to-day savings, but there’s a limit to the maximum amount of money you can have in your account.

Don’t get too excited about those interest rates from Absa and Standard Bank - they have different interest tiers depending on how much money you have saved, and those are the maximums, often requiring you to have a few million in the account.

Technically that FNB Money Maximiser is a money market fund, but you interact with it like a savings account.

Investec also has some great rates for savings accounts, but they typically need a minimum balance of R100k.

The Old Mutual Money Account actually puts your savings in a money market unit trust, which means it’s actually a pretty great option for most people.

Here’s a pretty cool online calculator that will help you find the savings account where you can get the best interest rate.

Looking for a money market fund because your short-term savings have gotten huge?

Looking for a conservative investment for a special savings goal?

You can buy most of these funds directly from the provider’s website, or try EasyEquities.

Local financial education site Just One Lap has a recommended low-risk ETF portfolio that’s really good. You have to register to see it, but it’s free!

Looking for a global index ETF for your freedom fund?

The best summary of which global ETF you should buy is from Stealthy Wealth.

EasyEquities is a very easy place to buy most of these funds.

RAND-DENOMINATED FUNDS:

U.S.-DENOMINATED FUNDS:

The US Dollar accounts are ones that you can open locally, online, as a South African, but you need to use US Dollars to invest in them. This means making an international transfer from your online banking profile or buying US Dollars in an app like Shyft. This does mean that you’ll need to take currency conversion costs into account, when comparing your options.

Not sure if you should invest in a U.S.-denominated fund, or the SA version? Here's a flowchart that might help you decide.

Local financial education site Just One Lap has a recommended high-risk ETF portfolio that’s really good. You have to register to see it, but it’s free!

Looking for a retirement annuity so that you’re not going to be old and poor?

All of these funds are Regulation 28 compliant, which means that you get the sweet, sweet tax breaks.

Once again, our good friend Stealthy Wealth has an excellent comparison for you.

A new player in this space is OUTvest, who’ve introduced a very interesting fixed-fee option which might be a great solution for people who have between 300k - 2.25m in their RA.

Just a note on 10X: their fees get a bit lower once you’ve got like R1-million invested with them.