JOHANNESBURG - South African’s household savings rate comes last when ranked against the G20 countries. This is distressing news, because it means that many South Africans are living in debt or eating into their capital.

In addition many of those who do manage to squirrel away some money are not saving wisely. 

Although 16million South Africans have savings accounts, they are emptier than they should be, and according to the latest SA Reserve Bank statistics, about 40percent of this money sits in accounts that offer very low interest rates, if any interest at all. 

If you have savings, you could be earning as much as 10percent on your savings each year and grow your wealth faster simply by switching to an account that pays a higher rate of interest.

Warren Kopelowitz, the chief executive at My Treasury, an independent personal finance comparison website, says: “Efficient saving can make a massive difference to your monthly income. If you moved your cash from a saving account that offers returns of 5percent to a long-term fixed deposit with an interest rate of 10percent, for example, you would effectively double your monthly income.”

With so much to be gained from switching to higher-interest rate deposits, why do so many South Africans continue to keep their money in low or no interest paying bank accounts?

The savings market is opaque and complex, making it virtually impossible to identify the highest-paying savings account that best matches your requirements. For instance, some banks offer higher rates for seniors, but do a poor job of marketing this. It is difficult to find bank rate data without comparing rates across a number of banks and products. 

Supplied/ PERSONAL FINANCE