There has never been a more important time to save than now in South Africa. This is according to the head of financial education at Old Mutual, John Manyike.
"Save whatever you can," he implored South Africans, explaining that tough economic conditions in the country will likely put even more strain to already financially stressed and over-indebted South Africans.
Most South Africans are struggling to save due to income challenges, acknowledged Prem Govender, the South African Savings Institute's CEO, however, for others, the challenge is "the lack of willpower and commitment," she said.
It is the latter group, particularly, that Manyike is encouraging to take saving seriously, "starting where you can, start with R100."
This World Savings Day, here are five types of savings accounts that can help you get started on your saving path:
1. Flexible saving accounts
For example, Standard Bank's PureSave, Nedbank's JustSave, FNB's Simply Save and Absa's Money Builder are examples of savings accounts where you can deposit or withdraw money at any time.
The more you save, the higher the interest rates.
2. Notice day accounts
In this type of account, you cannot get access to your funds until you serve whatever is your notice period as agreed with the financial institution. This may save "impulsive withdrawers." The notice periods range from 21, 32 and 61 days.
Normally the longer the notice period, the higher the interest rate.
3. Fixed deposits
You need a minimum investment as per the financial institution and you choose your investment period which could be anything from 33 days to five years. The interest rate is fixed for the period of your investment.
There are also flexible fixed deposits accounts, where withdrawals are limited to two of not more than 15 percent of savings.
5. Tax-free accounts
This type of saving could work for long-term investment.
These accounts were introduced in 2015 as an incentive for South Africans to save. Through tax-free accounts, one can invest up to R30,000 a year and it is capped at R500,000 per one's lifetime.
5. Stokvels
Millions of particularly black South Africans have historically been saving through stokvels to pool their money and get credit when needed. Saving through a group can help you be accountable to a larger collective and there is collective discipline, from which one can benefit.
Stokvels work through the contribution rules set by that group and they may pay you up on your birthday, at the end of the year or at a time you have determined.
Manyike believes anyone can save, only it needs a will and discipline.
He also cautioned consumers to live within their means in the tough economic climate South Africa is in. "It's important that consumers focus on things we have control over, such as how we control our money on our expenses," said Manyike -- and this is how these saving vehicles can help.