Six reasons why you should invest in RSA retail bonds

Julie Brownlee, Fsp Invest, 23 Jan. 2015

Tags: rsa retail bonds, government bonds, bonds, benefits of rsa retail bonds, buying bonds, what are rsa retail bonds

If you want to earn a decent rate of interest on your cash, you could consider putting it into bonds.

Bonds are a great option if you don’t need the cash for the next few years. And one of the easiest ways to do is through RSA retail bonds.

Let’s take a closer look…

What are RSA retail bonds?

The South African government launched retail bonds back in May 2004 to encourage saving.

By buying these bonds you’re lending money to the government. In return, you’ll receive interest payments twice a year. And when the bond matures, you’ll receive your initial investment back.

You can invest between R1,000 and R1 million and you can opt for two-, three- or five-year matures on fixed-interest RSA retail bonds.

The benefits of investing in RSA retail bonds

There are a number of benefits to investing in RSA retail bonds. Here are six of them…

  1. These bonds are risk-free investments.
  2. All interest and capital goes directly into your bank account. Plus you can opt to reinvest your interest payments to boost your investment.
  3. The bonds are paperless. This means you don’t have to worry about looking after certificates.
  4. The interest is fixed for the bond you opt for, so you know exactly how much you’ll earn.
  5. They are very easy to buy. Once you register, you can buy them directly from the RSA Retail Bond website, the National Treasury, any Post Office branch or any Pick n Pay store.
  6. You don’t have to pay any fees, commission or charges.

If you want to invest in RSA retail bonds, keep in mind that they’re not tradable. And if you need to sell them before they mature, you’ll have to pay a fee. So ensure you only put money you don’t need immediately into these bonds.

Bottom line: If you want to invest in bonds, RSA retail bonds are a great option to consider.

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