The more you invest the more your wealth will grow. As with any investment, you want the best returns at a low a risk as possible. And preferably a savings or investment vehicle that’s flexible enough to allow you to deposit extra or, in an emergency, withdraw your money at short notice. 

1. Unit trusts  

They’re an extremely flexible type of investment, allowing you to withdraw money or put in extra when you want to. Your choice is extremely wide of which are available to individual investors. These cover all asset classes, asset sub-classes (for example, resources shares or financial shares) and various mixtures of asset classes. 

2. A fixed deposit  

It gives you a steady return that’s a known quantity upon investing. The interest is however fully taxable at your marginal rate subject to the annual exclusion. This isn’t a bad option for a risk-averse investor and should be carefully considered if it’s appropriate to the risk that you’re prepared to take. 

3. A multi-asset low-equity or medium-equity fund  

This can give a better return than a fixed deposit over a five-year period without the risk that can be associated with a multi-asset high-equity or balanced fund. The return can also be more tax effective than that of a fixed deposit. 

4. Retirement 

Saving for retirement, it’s an important aspect of personal financial management and important investment you can do for yourself for later in life. Because once you retire, the way you manage your income can mean the difference between living comfortably in retirement or running short of money down the road. 

5. Money Market Account 

It’s an interest-bearing deposit account. These accounts typically earn higher interest than savings accounts and require higher minimum balances. Because they’re relatively liquid and earn high yields, money market accounts are a great option for your emergency savings. 

In exchange for better interest earnings, consumers usually have to accept more restrictions on withdrawals, such as limits on how often you can access your money. 

6. Notice Deposits 

They’re relatively flexible in terms of depositing money, but you must give a defined period of notice to withdraw what you’ve saved. This limits your accessibility, which is bearable only if the interest rates are worthwhile. The 32-day notice deposit offers tiered interest, depending on the amount invested. 

7. Long-term debt 

Another way to put your money to good use is to channel it into your mortgage bond. By putting the money into your home loan account, you’re, in effect, saving at the rate of interest of the loan. Without paying tax on the interest saved, which is almost certainly more than you’d be guaranteed anywhere else. You might make more in a high-risk investment such as an equity unit trust, but it would be a bit of a gamble over five years. 

8. Flexible fixed deposits 

Fixed deposits are designed for lump-sum savings, but a couple of banks offer more flexible arrangements that allow you to make multiple deposits over a fixed period. There’s FNB’s Flexi Fixed Deposit and Capitec offers a fixed-term savings plan with multiple deposits for clients on their Global One facility. 

9. Retail bonds 

There’s RSA Retail Bonds, the government bonds available to the public, offer attractive returns on lump-sum investments at almost zero risk. The bonds aren’t designed for month-to-month savings.  

However, with a little ingenuity you could structure your savings to take advantage of their attractive rates, especially if you also used a higher-interest savings account. After saving for a year in the savings account, you could put the accumulated amount into RSA Retail Bonds for two terms of two years each. There’s also Nedbank Retail Bonds. 

10. Exchange traded funds (ETFs) 

They’re similar to unit trusts in that they invest in the financial markets and are as easy to access. Most ETFs passively track an index, such as the FTSE/JSE Top 40, by holding the shares in the index in the same proportions.  

As such, they perform in line with how the index performs although there’s the drag of costs, which is often better than many actively managed funds. ETFs are mostly equities-based, and these have a similar risk profile to equity unit trusts. However, some newer ETFs invest across asset classes.