> Six steps to debt freedom

> Brighten their future

> Gold fever: here to stay?

> Nedbank goes green

> Evaluating performance

> Gold hits 18-month high

> Pay less estate duty

> Why lending will resume

> Positive platinum demand

> Breaking the habit

Today, 25 November 2009

› Animal group 'ignorant'

› Top ANC official hijacked

› Minister to 'repay' state

› Govt's R1bn SABC bailout

› Stadium leased for R1

Yesterday, 24 November 2009

› McBride: I'm being bugged

› Batting for Hersch

› Els gets thumbs down

› Maroga's salary summary

› Top ANC official hijacked

What’s the best product for you? Do you save through a fixed deposit or notice account, or lock your money away in government retail bonds?

"It's so difficult to answer that question," sighed Ben Stander, product manager of Old Mutual Bank. "It really depends on the customer’s needs, on how long they want to invest for, and their appetite for risk."

FAIS regulations stipulate that a thorough customer needs analysis be done before a product is sold to you, to ensure that what you get is appropriate for your needs and wants, Stander said. He suggested looking at the liquidity and interest options to find out which product is best suited for you.

"All those options (fixed deposits, notice accounts, savings accounts) are good options depending on the customer’s need. A bank account is a no-risk product. With fixed deposits, your risk is that if interest rates go up, you will be left with the same interest rate. But if rates go down, your rate will still stay the same," Stander advised.

Questions only you can answer:

1. What are you saving for? For example, a short-term emergency fund should be managed differently to more long-term investments or savings for specific goals.
2. How long do you want to invest for?
3. How much money do you want to save?
4. Are you saving a lump sum or a monthly amount?
5. Do you want the interest to be paid out to you or capitalised — added to the sum you are saving?
6. How much access do you want to your savings? Will you want easy access — say immediate or 24 hours — or would you be prepared to wait a month?
7. Look at the costs and the interest rates.
8. Think about inflation. You are only earning a real return on your money if your nominal returns — the interest rate the bank pays you — is higher than the inflation rate.

Don’t forget debt

It’s pointless saving money each month if you’re still running up credit card debt or have bank loans to pay off. Paying off debt will give you a better return than most savings and investments account, and the worst thing you can do is to get into debt in order to fund your speculations on the stock market. Get any debt you may have in order, and preferably extinct, before you start a savings plan.