JOHANNESBURG - Mellony Ramalho, African Bank’s group executive for sales and branch network, has this advice for first-time investors:

* Obtain advice. While this may be a first-time experience for you, there are many people out there who have been investing for years. Don’t be afraid to draw on their knowledge and expertise before making a decision. Do your research, ask questions and compare various products.

* Understand risk. Different products have different risk profiles. Savings are low-risk that must be liquid (available). Investments involve greater risk, but yield greater returns when left long enough on the stock market. The return on an investment is linked to the risk; the higher the risk, the higher the potential return and the lower the risk, the lower the potential return.

* Accessing your funds. Each product will have its own rules on accessing funds. A notice deposit account, for example, is a short-term investment product where you can withdraw your investment giving a notice period of seven, 32 or 90 days. Then there’s a fixed deposit where the length of the investment is set at either three, six, 12, 24 or 60 months.

* How deposits work. Once again there are different options depending on the investment product. Some products allow several deposits into the investment account with an unlimited maximum investment amount. Other products only allow a single deposit and some have a cap on the maximum investment amount.

* Look for the best interest rates available. Do your homework. Interest rates are key to the growth of your funds. Don’t be bamboozled by advertising and complex figures. Ask product providers for practical examples of how interest rates work on different products. 

PERSONAL FINANCE