Life assurance company Liberty has come up with an innovative way to get South Africans to save: an app that automatically invests for you while you transact on your bank cards.
The app, called Stash, enables you to save into an equity-based tax-free savings account by rounding up your day-to-day shopping transactions and transferring the “change” into the investment account.
All the bank or credit cards on which you transact can be linked to the app.
Juan Labuschagne, the head of development at Stash, says users decide how much they want to stash. The app rounds up the amount of every transaction. For example, if you decide that your Stash limit per transaction is R10 and you do a transaction of R45, this would be rounded up to R50. The difference of R5 is stashed.
Labuschagne says: “All this spare change accumulates without interfering with your day-to-day life. Stash checks your daily bank balance and never transfers more than you can afford, so you don’t have to worry about going into overdraft. Before you know it, you’ll have a significant Stash balance. Your Stash grows as fast as South Africa’s biggest companies do, because your spare change is invested in South Africa’s top 40 listed companies.”
Because you’re investing in a tax-free investment, which is designed for long-term saving, you have certain restrictions: you can invest up to R33 000 a year, or up to R500 000 over your lifetime. You can withdraw money from your investment, but the restrictions remain on what you have put in. So if you have invested R33 000 for the year and withdraw R20 000, you can’t invest any more during that tax year, resulting in your investment for the year being only R13 000.
There are no subscription fees for the Stash app, and Liberty has assured Personal Finance that there are no investment charges on your savings, which are in a fund that tracks the FTSE/JSE Top 40 Index.
The app gives you a full transaction history and the growth on your investment.
Downloading Stash is quick and simple. When you download Stash from the Google Play Store, you get R50 to kick-start your investment journey, just for signing up. Every time you refer a friend, you are rewarded with R10 in your Stash account.
Stash is currently available for Android-powered devices only.