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Two Ways To Start Investing With Only R500

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We all want the good life. But, YOU have to make it happen because Le good life just doesn’t come on a silver platter. And, if you think you need millions to start investing, then you’ve been misinformed. All you need is R500 every month.

It might seem too small an amount, but, it’s a starting point that will significantly grow with time. So, today I want to share two ways to get the best possible returns for your money starting with R500.

 

1. Fixed deposit account

Most people use fixed deposit accounts for lump-sum savings. However, FNB and Capitec allow you to start with a minimum amount.

FNB’s Flexi Fixed deposit accepts deposits from R100. You can increase your deposit amount at anytime but, you can only to withdraw 15% of your savings, twice a year. Brilliant! What’s more, you’ll also earn interest between 2.25% to 4.25% depending on the investment amount.

Then, there’s Capitec. They offer a fixed-term savings plan where you can deposit money whenever you like but you can only withdraw once your savings term is up. This term ranges from a minimum of six to 24 months. The only negative with this plan is the 6.4% fixed interest rates because you’d lose out slightly if the rate increased.

2. Exchange traded funds

These are similar to unit trusts because they invest in the financial markets and are as easy to access. The minimum monthly investment is R300. You can go through the online platform etfsa.co.za, which covers all exchange traded products in South Africa. One of the most established ETFs , the Satrix 40, tracks the FTSE/JSE Top 40 index.

ETFs are less costly than active funds. Therefore, they are becoming very popular. However, because you trade ETFs  like shares on the stock exchange, they incur some additional costs, such as brokers’ fees.

Lastly, if you have between R250 and R500 to save then try looking at unit trusts. These provide investors with an opportunity to access the market at a competitive cost.

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