Fixed Rate RSA Retail Savings Bonds

Last update 1 October 2017

Current Rates

Term
Yield %
*Yield on 5 year bond redeemed early %Improvement in Yield %
2 yrs
7.75
8.15

+0.40

3 yrs
8.00
8.26

+0.26
5 yrs
8.50

*Option for over 60’s buying bonds that pay interest monthly.  Refer to Insight

During September, the 5-year Government Bond yield increased marginally (approximately 0.13%).   All term RSA Retail Savings Bond rates subsequently increased by 0.25% for the month of October. RSB rates are now more in line with Bank rates.

Historic Rates

Click on chart to enlarge

Rate Expectations for November 2017

Last update 2 October 2017

It is still early in the new month.  Be sure to check back later in the month for November expectations.

The difference between RSB Rates and Government Bonds rates has widened further in October

5-year Retail Savings Bond Rate versus 5-year Government Bond Rate

Click on chart to enlarge
RSA RSB Rates are changed in minimum steps of 0.25%

Investment rates for new bonds are set by the National Treasury at the start of each month, and are primarily determined based on the levels at which Government Bonds are trading in the capital markets. By keeping an eye how these bond levels have changed over the month, it is possible to get a good idea what changes, if any can be expected in RSB levels. This information is useful in determining whether to buy or re-start now, or hold off in the hope of better levels next month.

For those interested in more detail in the moves of the RSB bonds relative to Government bonds, more detail is below

How do the RSA Retail Bonds rates compare to Bank Deposit rates?

Last update 3 October 2017

It wasn’t long ago that savers could get similar or higher rates on RSBs than they could get from their bank for the same term. Given that the RSBs are:

  • a better credit

  • can be re-started should rates go higher, and

  • for the over 60’s can be redeemed reasonably cheaply,

means that they still offer good value relative to bank term deposits.

Recently however, there has been a noticeable increase in Bank Deposit Rates relative to Retail Savings Bonds rates, and the top rates offered by some of the banks are now 0.50% higher than the same term RSBs.

For those able to access these top rates (typically you need to be 60+ and have R100,000 to invest), bank deposits are now worth considering as part of a savings portfolio.

Top Market Retail Rates Oct 2017

Click on chart to enlarge

The significant value associated with the re-start option however, means that we continue to favour a larger holding of RSB relative to term bank deposits.

BankLast rate refresh date
ABSA1 Sep 2020
FNB17 Aug 2020
Nedbank1 Sep 2020
Standard Bank1 Sep 2020
RSA Retail Bonds1 Sep 2020

At this stage, we only compare the “Big 4 SA Banks” retail rates given their credit quality is closest to RSA Retail Savings Bonds.  Over time we may look to add the other banks.  Refer to Insight

The latest published rates are used, where we find each bank’s top product offering by investment term for an investment of R100,000 by a 60+ year old investor. This view of banks’ top rates provides a good overall guide to SA bank rates, their differences and trends.

It is interesting that for competitive reasons the Banks always pay very much the same rates in the wholesale markets. In the retail market however, the rates can be materially different – so keep an eye on what is available and negotiate your rate!

South African Government Bonds

Fixed Rate RSA Retail Savings Bond rates are primarily set off and affected by the yields of Fixed Rate South African Government Bonds traded on capital markets.  General market conditions also affect the final Retail Savings Bond rate offered.

As at 30 September 2017, Government Bond Rates were as follows:

Bond NameTerm to Maturity (Years)Yield %
R2041.27.02
R2072.37.33
R2083.57.56
R20235.47.96
R1869.28.62

Interpolating the rates as at 30 September 2017, we obtain 2, 3 and 5-year Government Bond Rates

Interpolated Term (Years)Interpolated Yield %
27.24
37.46
57.87

SA Government Bonds with maturities of 2, 3 and 5 years are remain around their lowest yields for the last 12 months

SA Government Bond yields for the last 12 months.

Click on charts to enlarge

2-Year: SA Government Bond vs RSB yields

3-Year: SA Government Bond vs RSB yields

5-Year: SA Government Bond vs RSB yields

The BondClub Market Data section provides a handy general summary of rates in the SA Retail Savings Market as well as some commentary about it.

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