R11bn invested in RSA bonds

More than 36 000 people, most of them over the age of 60, have entrusted the government with almost R11 billion of their savings in its RSA Retail Bonds.

The main attraction of the bonds is their competitive interest rates, and also the fact that the investment is virtually risk-free.

The National Treasury launched the RSA Retail Savings Bonds in 2004 to encourage more South Africans to save by providing accessible, safe, no-fee products in a cash savings market dominated by banks, which offered pathetic returns. However, since the retail bonds were launched, the banks in general have still not offered competitive rates.

After a slow start and an expansion of the product range, the RSA Retail Bonds are now on course to attract about R5 billion a year. More than R4.3 billion has been invested since April last year, with a monthly record of R916 million in November last year. The treasury says this brings the total amount invested in these products since their launch to R10.9 billion, with over 36 000 active investors and over 70 000 active investments.

In a statement issued this week, the treasury says the bonds are intended to support the government’s savings initiative and encourage a longer-term savings outlook among South Africans.

“Savings rates in South Africa are relatively low, leaving households vulnerable to unplanned events and emergencies. The bonds are part of an overall campaign to educate and to encourage people to manage their finances. They are an affordable investment product, offering competitive returns, and are backed by government.”

Since the government introduced a measure that allows interest to be withdrawn monthly, the RSA Retail Bonds have become particularly attractive to people on fixed incomes, such as pensioners.

And while retail bonds help consumers to save, the government uses the money invested to help fund its borrowing requirements.

The National Treasury is optimistic that investments in retail bonds will be able to fund between five and 10 percent of the country’s total borrowing requirements within the next two years.

You can find out more about RA Retail Bonds by going to www.rsaretailbonds.gov.za or at your local post office or Pick n Pay.


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