DURBAN - A series of recent polls conducted by Capitec to gain consumers’ sentiment towards lazy money indicate that 86 percent of participants don’t know what lazy money is.
Lazy money refers to money in a transactional account that doesn’t earn any interest.
A missed opportunity, if you consider that if this money earned just 4.75 percent interest p.a. this would put over R14 billion back into South African’s pockets.
The poll also showed that:
1. 40 percent doesn’t have a savings plan
2. 20 percent doesn’t even know what a savings plan is
3. 59 percent of people with a savings plan don’t know how much interest they are earning
These results show the opportunity that exists for consumers to harness compound interest to make their money work harder for them.
In an effort to encourage South Africans to put their money to work, Capitec is calling consumers and the SA banking industry to “#SayNoToLazyMoney”. According to Capitec, the hashtag #SayNoToLazyMoney trended on Twitter during July where the bank saw consumers’ conversations mirror the results of the polls.
"We strive to help our clients bank better so that they can live better. Saying no to lazy money is one of the ways we are living up to that promise. Your transactional account should grow your money and not just hold it," said Francois Viviers, Capitec’s marketing and communications executive.
How can South Africans say no to lazy money?
The 20 percent who don’t know what a savings plan is and the 40 percent who don’t have one:
Make the most of your savings plan and pay yourself first by transferring some of your money into it at the beginning of each month. The easiest way to do this is to setup a recurring monthly payment on your bank’s app, which takes the thinking out of saving.
The 59 percent who have a savings plan, but don't know how much interest they are earning.
Not all savings plans are created equal. It’s important to check the interest you will earn as well as speak to your bank about the savings plan that suits your goals. Capitec clients get 4 free savings plans and earn up to 8.55 percent interest p.a.
Apart from the interest you can earn, also check your bank statement to see how much you pay each month in bank fees. The average Capitec client pays just over R50 per month in fees. Rather move the money you would have spent on bank fees to a savings account.
Viviers suggests that all banking clients should go digital to stay in control of their money. "Use your bank’s app to easily keep track of your spending in real time. Digital banking allows you to check balances and view statements to see where key spending areas are. It makes it easier to identify unnecessary expenses," said Viviers.
Capitec said that there are helping initiate conversations about lazy money on social media and calling for South Africans to #SayNotToLazyMoney. The bank has also sent out email communication to our clients to encourage them to join the conversation.
BUSINESS REPORT ONLINE