What consumers should and shouldn't be doing with their savings right now
In the midst of the global Corona pandemic, putting anything near one’s mouth is a serious no-no. Yet that’s exactly where one bank is putting its money…
Despite the fact that the South African Reserve Bank dropped the interest rate by a dramatic 1% (making prime interest 8.75%), TymeBank has announced that, come what may, they will honour their commitment to their customers and keep their interest rate unchanged at 10%.
This is especially good news for those South Africans already taking advantage the GoalSave savings tool; a free added service that allows customers to earn up to 10% interest per annum by simply putting their savings in a GoalSave pocket.
Chief Strategy Officer, Greg Illgner, had this to say about their decision:
“Our business is built around our customers and giving them greater control over their money. In such uncertain times, when so little is in anyone’s control, we wanted to give people as much peace of mind as is possible – knowing that they will still be consistently earning the best interest rates on their savings for the next 3 months at the very least.”
These are uncertain times indeed. So what advice does an industry leader like Greg have for the general public?
According to Greg, now is not the time to make any rash decisions with your money. Leaving it in a savings account (especially one with a high interest rate) is one of the safest places to keep it. “Your money is still very safe in the bank, there’s no need to withdraw it. South Africa’s banking industry is respected around the world. If you are with a well-regulated, Tier 1 bank, take comfort knowing that our business has been built for times like these.”
To the extent that you have money to save, put it somewhere it can gain the most interest, quickly. In Greg’s own words, “While traditional banking wisdom said that you either had to have a vast amount of money, or leave your money in a savings account for a long period, in order to really reap the benefits of interest, we don’t think this serves the vast amount of people trying to save in our country. That’s why we’ve done all we can to give the best rates to the people who need it the most. From the first Rand our customers save, they earn 6%. After 30 days, this increases to 7%, and after 90 days, it increases once again, to 9%. The money is always available immediately, with no penalties, however, if customers are willing to wait ten days (or plan ahead), they’ll earn a bonus on top of their interest that takes the maximum interest they’ll earn up to 10%. No other savings account comes close.”
Keep an eye on your money and credit score
Although Greg and other industry leaders are calling for calm, now is certainly not the time to be burying one’s head in the sand when it comes to your finances.
“To reassure our customers and empower them with as much knowledge as possible, we tally their accrued interest and add it to their savings account daily. Many log on every day just to watch their money grow. Of course, they’re also able to take it out whenever they may need it.”
Beware of loans
Nobody knows for certain what the current crisis is going to do to our economy or to each of our own pockets, but Greg warns people to think twice before taking out any personal loans unless really necessary - especially given the flux in global interest rates. “If you’re going to take out a loan, make sure it’s from a reputable institution.”
Remember what your true assets are
“We have an unfaltering belief in the potential of people in South Africa, and at times such as this, more so than ever. Our collective resilience, our sense of humour, our remarkable ability to support one another when it counts and bounce back from anything… these are our real national assets,” says Greg, “And they really count in times like these. So be kind, don’t panic, be the best you can be – you’ve got this. We’re behind you every step of the way.”
TymeBank’s move to maintain their market-leading interest rate means that, unlike their competitors, they are prepared to take the hit themselves - instead of simply passing the buck onto the consumer.
That’s a kind of corporate courage that’s rarely seen in today’s cut-throat world - about as rare as finding hand sanitizer on the shelves of your local grocery shop.
If housebound customers would like to take advantage of TymeBank’s interest rates, they needn’t even leave the couch.