Fixed deposits update for November 2021

Good news

Good news all round for savers as a number of banks have increased the interest rates they offer on fixed deposits since last month. Absa, SA Retail Bonds, Fedgroup, FNB, Discovery, Standard Bank have all increased interest rates by between 0.2% to 0.9%. A noteworthy comment reg SA Retail bonds. The rates offered surge further ahead in the rankings. They have increased their rates for their fixed 2-year offering by 0.7%, whilst both the 3-year and 5-year increased by further 0.5%. Retail bonds' 5-year continue to offer the best interest rate at 9.73% (or 9.5% nominal) in the country. A 9.7% interest rate means you will achieve a real rate of close to 5% if inflation continues to over between 4-5% over the next 5 years. A 4-5% per annum return ahead of inflation is hard to achieve in any asset class. Given the low-risk nature of fixed deposits, I think they do offer real value.

Changes to interest rates over the last month...

BankTermLatest effective rateChange
Absa246.33%0.9%
SA Retail Bonds247.38%0.77%
Fedgroup246.33%0.65%
FNB607.34%0.54%
Discovery185.64%0.52%

If you have multiple RSA Bonds, here is a great free analysis tool...

www.bondclub.co.za

Gordon F - a former bond trader at a big bank - has created an awesome, free tool. If you have multiple RSA bonds, the tool will allow you to see "aggregated portfolio measures such as capital, yield and life for each bond type and for the total portfolio. Detailed interest return measures are also shown by bond types held." My favourite feature is the yield curves. If you are a fixed income fan, make sure to check out bondclub.co.za

Cheers Walter