The focus around higher interest rates has mostly been the effect it will have on our debt repayments, but what we forget is that higher rates are really good for savers who, for a long period of time, have received less and less interest on their cash deposits. Since 2009 interest rates have halved, reducing income for those who invest in cash.

As a saver, you pay no tax on the first R23 800 of interest if you are under the age of 65. That means you could invest R330 000 at 7% and pay no tax on the interest. Individuals over the age of 65 do not pay tax on the first R34 500 of interest, or nearly R500 000 at 7%.

If you are sitting with cash savings in your bank it is worth finding out whether you are earning the best rate possible for your money. Generally speaking, your current account would have the worst interest rate and the banks offer a range of investment products depending on the size and duration of your investment. But even within those investment options, you could further maximise your return. We take a look at which products to consider depending on who you bank with.

Nedbank

If you have R5 000 and want easy access to your money, then consider the JustInvest money market account which is paying 5.5% on balances between R5 000 and R9 999 and 6% on balances between R10 000 and R19 999. If you have R50 000 or more then opt for Money Trader which also provides immediate access but pays 7% on R50 000 compared to 6.6% invested in JustInvest. If you are prepared to give 32 days’ notice, then you can earn up to 7.35% on your R50 000.

Fixed deposit rates: These rates are paid for deposits of R1 000 or more, making it one of the better options for lower balances.

Absa

If you have R15 000 in an Absa account and want easy access, invest in the Depositer Plus which starts at R15 000 and offers 5.7% interest per annum. The rate increases along with the balance ‒ for example on R75 000 you would earn 6.55%.

Fixed deposit rates: Absa also offers fixed deposit rates on R1 000 or more, however if you have between R10 000 and R100 000, then the Prime Linked Account would be your best option and as it is linked to prime, the rate you get increases along with the prime rate.

FNB

Money on Call pays 5.4% from the first R5 000 but if you have at least R100 000 to invest, your best option is the Money Maximiser account which provides immediate access at 7% compared to Money on Call which pays 5.4% on R100 000. The 32-day Flexi Notice also pays a rate of 7% for R100 000 but you would not have immediate access.

Fixed deposit rates: These rates are for balances between R10 000 and R249 999.

Capitec

Capitec has the best rate for a current account, paying 5.35% on your funds in your transactional account. If you want to keep your savings separate from your day-to-day spending money, its flexible savings account offers the same rate (5.35%) for balances under R25 000 and 5.65% for balances between R25 000 and R99 999.

If you have R10 000 or more and don’t need immediate access then consider their fixed deposit options.

The best longer-term deposit rate

If you are able to put your money away for two years, the RSA Retail Savings Bond is without a doubt the best product on the market, and has a minimum investment of just R1 000. There are no costs, and since it is backed by the government, the risk is very low. You can invest through PicknPay, the Post Office or through the website.

The Nebank Green Savings Bond is a similar product, with attractive interest rates and a minimum investment period of only 18 months as opposed to two years for the RSA Retail Bond. The minimum investment amount is also only R1 000. Currently, Nedbank is offering a special rate for a five-year investment of 10.06%.

Best rate for R100 000

Investec Bank has a minimum investment amount of R100 000 but offers attractive rates. These rates are for fixed deposits of between R100 000 and R250 000.

This article first appeared in City Press.