Retail Savings Bonds: The easy way to access SA’s bond market

Fsp Invest, 19 Nov. 2013

Tags: retail savings bonds, retail bonds, bonds, what is a retail bond, what is a retail savings bond, how to buy retail savings bonds, bond market, invest

It wasn’t too long ago when bonds were the hunting ground of the very wealthy. But now there is a variety of different ways that you can get your piece of the action. If you fancy gaining some exposure to government bonds, one very accessible way is to buy Retail Savings Bonds. Read on to find out more about Retail Savings Bonds, the easy way to access SA’s bond market…

If you’re looking for a quick and easy entry to the bond market, then you can look no further than Retail Savings Bonds, Gareth Stokes in Fear, Greed and the Stock Market explains…

The launch of Retail Savings Bonds back in 2004 was the government’s attempt to make the bond market more accessible to the private investor.

These bonds offer you a quick and easy solution if you’re looking for reasonable yields in the short- to medium-term. And they’re practically risk-free.

You can pick how long you want to invest for

You can buy bonds for three different time frames: Two, three or five years. To buy Retail Saving Bonds, you need to purchase them in fixed units of R1,000.

It’s a fixed interest rate from the time when you purchase a bond. This means that you’ll know at the start of your investment what return (or yield) you will get back.

Currently, the interest rates are:
  • 2 year Retail Savings Bond 6.50%
  • 3 year Retail Savings Bond 7.00%
  • 5 year Retail Savings Bond 7.50%
When you buy the bond(s), you can decide whether you want to receive the interest twice a year or whether you want to reinvest the interest.

If you opt to reinvest the interest, you’ll benefit from compounding.

And, what makes buying these bonds even better, is how simple you can do it. No stockbroker required! You can register and buy them directly from the Retail Savings Bond website or pop into your local Post Office. And once you’re registered, you can even buy them at Pick n Pay.

So there you have it, Retail Savings Bonds, the easy way to access SA’s bond market.

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