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A Fin24 user wants to know how to invest an amount of R36 000. She writes:
I want advice on making a small investment of R36 000, which could be used to start a supplemental income for a pension.
My husband and I are in our 70s and did not save enough when we could.
We have now started saving as we are lucky enough to be working and will be putting whatever is left into a savings account each month.
We have a savings account at Capitec Bank Holdings Limited [JSE:CPI] – a current savings account at 5% per month and an 18-month account at 5.75%, which ends in February 2014.
Could we do better than this?
Gustav Potgieter of Aurum Trust responds.
The current interest rate that you earn is good for the investment amount and the risk associated with it.
You could do better with limited risk associated with conservative unit trust investments or even government bonds, which yield higher returns, but you are locked in for a period of up to five years.
There are numerous low risk unit trust investments which offer you access to your money at short notice.
You can add money and their target returns are normally inflation plus a percentage, or money market plus a percentage.
Unit trusts also offer you the opportunity to make regular withdrawals to increase your monthly income.
Please note that these withdrawals are of a capital nature and if you draw more than your growth, you could have a loss of capital.
It really would be best to speak to an independent financial planner, who can assist you with an appropriate option.
- Fin24
Do you have a pressing financial question? Post it on our Money Clinic section and we will get an expert to answer your query.
Disclaimer: Fin24 cannot be held liable for any investment decisions made based on the advice given by independent financial service providers.
Under the ECT Act and to the fullest extent possible under the applicable law, Fin24 disclaims all responsibility or liability for any damages whatsoever resulting from the use of this site in any manner.
I want advice on making a small investment of R36 000, which could be used to start a supplemental income for a pension.
My husband and I are in our 70s and did not save enough when we could.
We have now started saving as we are lucky enough to be working and will be putting whatever is left into a savings account each month.
We have a savings account at Capitec Bank Holdings Limited [JSE:CPI] – a current savings account at 5% per month and an 18-month account at 5.75%, which ends in February 2014.
Could we do better than this?
Gustav Potgieter of Aurum Trust responds.
The current interest rate that you earn is good for the investment amount and the risk associated with it.
You could do better with limited risk associated with conservative unit trust investments or even government bonds, which yield higher returns, but you are locked in for a period of up to five years.
There are numerous low risk unit trust investments which offer you access to your money at short notice.
You can add money and their target returns are normally inflation plus a percentage, or money market plus a percentage.
Unit trusts also offer you the opportunity to make regular withdrawals to increase your monthly income.
Please note that these withdrawals are of a capital nature and if you draw more than your growth, you could have a loss of capital.
It really would be best to speak to an independent financial planner, who can assist you with an appropriate option.
- Fin24
Do you have a pressing financial question? Post it on our Money Clinic section and we will get an expert to answer your query.
Disclaimer: Fin24 cannot be held liable for any investment decisions made based on the advice given by independent financial service providers.
Under the ECT Act and to the fullest extent possible under the applicable law, Fin24 disclaims all responsibility or liability for any damages whatsoever resulting from the use of this site in any manner.
