Several banks now offer a feature where you can “save as you swipe”, effectively creating a digital “change jar” into which you can save small amounts without even noticing it.
FNB recently announced that its retail customers had accumulated over R2 billion in the last year by saving small amounts ranging from R2 to R50 through the Bank Your Change® feature linked to their FNB savings account.
Over the last three years, FNB customers have accumulated a total of over R5.5 billion in their savings account earning 3.8% interest.
Bank Your Change® is a really smart feature by FNB that allows all FNB customers who have a transactional bank account to save a small amount each time they use their FNB debit card to buy goods or services.
The feature rounds up each debit card purchase to the nearest Rand value chosen at activation, and sweeps the difference into the customer’s linked FNB savings account.
Last year Capitec introduced a similar product with its Live Better savings account which currently pays an interest rate of 4% per annum. These are great interest rates for relatively small amounts of money. These savings can be used as your rainy-day fund or to give you a cash boost at the end of the year.
It’s easy to save as you swipe
As we are now more likely to swipe a card than use cash, it is effectively the digitalisation of that change jar we used to keep at home, into which we would empty our pockets each day of coins.
You set an amount that you want rounded up to and every time you swipe your card it rounds up to the nearest R2 or even R50. For example, if you selected to round up to the nearest R10 and bought an item for R73, then the transaction would be rounded up to R80 and the R7 difference would be transferred to your savings account.
Old Mutual Money has a similar savings product linked to the Old Mutual Money account, except you select an amount between 5% and 15% of every card purchase to be transferred into a money market unit trust in your name.
For example, if you spend on average R5 000 per month using your debit card and set the savings percentage at 10%, you automatically save R500 per month. You earn money market rates from the first rand. Customers can active the Swipe & Save functionality on their Old Mutual Banking App.
Non-banks are also offering clever ways to save painlessly. Multiply, Momentum’s reward programe gives cashbacks when shopping with partners like PicknPay which are paid into a savings account. If you are a Momentum Health member, a great way to use these cashbacks is to transfer them to your medical savings and use the cashbacks to supplement your medical expenses.
Stash is an app from Liberty that allows you to save small amounts as-and-when. Although not directly linked to spending on your bank card, anytime you feel inspired to save you can just tap and top-up your investment from as little as R5.
For example, you may decide to make lunch at home and save yourself R40 by not buying a take-away. You can convert that R40 into a real saving by tapping on the Stash app and adding R40 to your investment. As it is a tax-free savings account, you pay no investment tax. You can invest up to R36 000 a year, up to R500 000 over your lifetime, into your tax-free investment. There are no fees to invest with Stash and no paperwork.
Stash offers investors options between investing in cash or in the stock market through a SA Top40 share portfolio. This makes it one of the cheapest ways to access a market linked investment and is ideal for longer-term savings. You can download the Stash app from Google Play or the Apple Store.
If you find it difficult to save or need motivation, automate it so that you save as you swipe. That small change will add up to something significant over time.
This article first appeared in City Press.