Impact of RSA Retail Savings Bonds/Government Retail Bonds
- Guaranteed returns, as interest rate is fixed for the whole investment period.
- Interest rates are market related and attract more investors.
- Interest can be received twice a year.
- Interest is usually higher than on fixed deposits.
- Retail bonds are listed on the capital bond markets/on the JSE.
- Low risk/Safe investment, as it is invested with the South African Government which cannot be liquidated
- No charges/costs/commissions payable on this type of investment.
- Investment may be easily accessible, as cash may be withdrawn after the first twelve months.
- It is an affordable type of investment for all levels of income earners including pensioners.
- Retail bonds are easily/conveniently obtained electronically/from any Post Office/directly from National
- Investors younger than 18 years/Minors may invest with the help of a legal guardian, which encourages
- saving from a young age.
- Retail bonds cannot be ceded to banks as security for obtaining loans.
- A minimum of R1 000 must be invested, which may be difficult for some small investors to accumulate
- Retail bonds are not freely transferable amongst investors.
- Investors need to have valid SA identification/should be older than 18 years which may discourage
- foreigners/young people to invest.
- Penalties are charged for early withdrawals, if the savings is less than 12 months old