How to make sure your savings keep up with the rate of inflation

Fsp Invest, 06 Sep. 2013

Tags: retail bonds, inflation linked retail bonds, inflation linked retail savings bonds, cost of living, inflation,

If you’re looking to put some money away for a period of time, but you don’t want to risk it on the stock market, then look no further. Inflation Linked Retail Savings Bonds could be just the answer you’re looking for. This investment tool allows you to safely save your money and keep up with the rate of inflation. Let’s take a closer look at Inflation Linked Retail Savings Bonds…

Inflation linked Retail Bonds means inflation won’t erode the cash invested in them, the team of experts explain at The South African Investor

When you buy Inflation Linked Bonds, you investment is adjusted twice a year until maturity against the Consumer Price Index. This is the measure for consumer inflation in South Africa.

This means that you will receive a return that is similar to the cost of inflation. These bonds are also an inflation hedge.

You can invest in Inflation Linked Retail Saving Bonds for periods of three-, five- and ten-years.

Keep up with the cost of living with an Inflation Linked Retail Savings Bond

By investing in this type of bond, the return you receive won’t lose value against the average cost of living. So this cash will maintain its spending power.

For inflation linked bonds, the government guarantee the capital. But unlike fixed rate retail bonds, the interest payable will fluctuate every six months. This is due to the adjustment of the interest rate according to CPI.

A real rate of return us the basis of the interest payment rate. This is the difference between the published CPI rate and the nominal rates prevailing in the market.

So these bonds have the capital amount adjusted to match inflation. So this gives you a real rate of return.

Just visit the Retail Savings Bonds website to find out more and to buy bonds.

So there you have it, how to make sure your savings keep up with the rate of inflation.

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