Savings comparison: 32-day notice deposit accounts

Fixed savings deposit accounts are one of the best known ways to save, something which given the current economic climate has become a necessary. That being said, there are however a range of fixed savings accounts out there with different fees and benefits, one of them being the 32-day notice deposit savings account. Moneybags journalist Danielle Van Wyk explores the big four banks’ 32 day account offerings.

The comparison

The table below looks at the basic fee structures and aspects of Nedbank, First National Bank (FNB), Absa and Standard Bank’s 32-day notice account offerings. The accounts are compared on the basis of the notice period, the interest rate range, the monthly fee, the minimum deposit amount and the minimum balance, as well as the withdrawal penalty fee for early withdrawals.

It is important to note that there are a number of other aspects of the accounts that have not been looked at here. The account offerings vary slightly between the different banks, as such the below aspects of the accounts were chosen as they are standard across all the banks compared.

savings account table

*The percentage charged is dependent on the notice period given, less than 32 working days.

-The above information was accurate as of 10 August 2016. The figures are subject to change at the banks’ discretion.

Analysis

From the above table, Nedbank appears to offer the better account as they have the lowest account balance limit and offer the highest interest earning opportunity (up to 7.35%). However, achieving the highest interest rate bracket may be difficult due to the balance that you need to attain to earn it.

FNB and Absa in contrast offer a minimum interest rate of six percent. However, for both Absa and FNB a higher minimum balance needs to be maintained (R1,000) when compared to Nedbank (R250). When you consider the importance of saving the higher interest rate could be an incentive for people when choosing an account, and the higher minimum balance would mean you would be required to ensure that at least R1,000 remains in the account at any one time.

While Absa and FNB offer the same minimum interest rate, FNB comes out on top by offering the higher maximum interest rate between the two banks at 7.2%.

For all the accounts tabled the notice period is 32 days, the idea being that consumers are to wait out the period before making any withdrawals. When it comes to wanting to access your funds you are required to provide 32 business days’ notice, which may be a problem when you required instant access to your funds.

In cases where consumers need to withdraw money before the 32-day notice period, a penalty fee usually applies.

In this regard only FNB and Standard Bank have set penalty amounts, while Nedbank and Absa rely on the discretion of the bank branch where the consumer is a customer. This wildcard approach unfortunately leaves the consumer in the wind as, circumstance dependent, they could potentially be paying more than they bargained for.

Dependant on the withdrawal amount it’s a toss-up between FNB and Standard Bank, as to who offers the better (i.e. more affordable) penalty fee. The higher the withdrawal amount the more you may pay at FNB. For example if you were to withdraw R15 000 at a three percent penalty fee at FNB it’s R450, it is here where Standard Bank’s offering of a flat R400 presents as better. On the flip side, however, should you want to withdraw a smaller amount that for example falls below the R500 mark, the payment of a flat fee of R400 hardly seems worth it.

It is also worth noting that none of the mentioned accounts call for any monthly fees, making this a true saving venture.

Besides 32 day accounts there are also other options of investment accounts such as Absa’s Target save account, Nedbank’s range of investment accounts, FNB’s 7 day notice account, Standard bank’s investment account range etc.

Investing is always a good idea but what remains key beyond that is choosing an offering that caters to your personal financial needs. If you are unsure as to how to navigate through the process, it is always advisable to consult a trusted financial advisor before making a decision. If you don’t have a financial advisor you can approach, the bank personnel at your local bank should be able to assist in finding a product offering that meets your needs.

If you would like to compare more savings accounts, or other banking products, Moneybags’ sister website Justmoney, offers a comparison tool. Click here to access it.