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7 Best ways to invest and grow money in South Africa

Woman holding a tablet with financial charts on a desk in front of her

Money may not be the answer to all your woes, but it can give you access to opportunities and ways to enhance your lifestyle and those of the ones you love. 

But simply saving isn’t enough. It is important that we all learn where to invest our money so that its value can keep growing.

Want to know where to invest your money in South Africa? Check out our list of the 7 best investment options that you can use.


Best ways to invest money in South Africa

A graphic that lists the 6 best ways to invest money

1.  Tax-free savings accounts

A tax-free savings account allows you to save money without having to pay tax on the growth of your investment, the interest, or the dividends.

These savings accounts provide you with the opportunity to start investing and saving money even when you have minimal surplus cash. Tax-free savings accounts are considered to be low risk and you can start investing with very small amounts.

Keep in mind that tax-free savings/investments have rules. The limitation to a tax-free savings account is that you may only invest a maximum of R36 000 per tax year and R500 000 over your lifetime

If you exceed the annual or lifetime cap, you will be penalised and pay 40% tax on the excess contributions.


2. Fixed Deposits

In a Fixed Deposit, the money you invest is not accessible for the fixed term, but banks typically allow you the flexibility to invest funds from periods as low as 7 days to 10 years.

You can determine the most viable savings period based on your financial goals. Generally, the longer the fixed-term, the higher the interest.

Fixed deposits have some appealing benefits:

  1. higher-interest rates (than flexible savings accounts),
  2.  guaranteed returns,
  3.  a flexible investment term,
  4. it is a one-time investment
  5.  You have the option of taking a loan against your Fixed deposit.


Good to remember: The interest on a fixed deposit will only pay out on the maturation of the fixed term, so unlike a typical saving deposit, once you have agreed to the terms, your money will be locked in.

Before deciding on an investment option, it is important to create a financial portfolio to determine what your needs and possibilities are.

Check to see if you qualify to reduce your debt instalment with our quick quiz

3. Funds & ETFs

What is the difference between a fund and an ETFs (exchange-traded fund)?

With a fund, you buy and sell listed investment products based on a rand amount specified by you whereas with an ETF, you buy and sell based on market price—and you can only trade full shares.

Withdrawing from your ETF is simple with an instruction to sell and liquidity is guaranteed.

ETFs are considered to be low-risk investments because they are low-cost however unique risks can arise, as well as tax considerations based on the type of ETF you invest in. Is this the right investment choice for you?

Bonus: 10 Best ETFs in South Africa 2022

You are allowed to sell your fund at any time after buying shares. The consequences are determined by the type of fund you own. Some funds charge an early redemption fee if you sell your shares before a prescribed period of time.


4. Bonds & Treasury Bills

Bonds and Treasury Bills is an investment with the Government of South Africa.

There are two options on offer is RSA

  1. A fixed interest option with a rolling maturity of two years, three years and five years
  2. An inflation linked bond that is protected against inflation with  a three-year, five-year and ten-year maturities


The interest rate on these types of investments cannot be negotiated and are determined by the Government Bond Yield Curve making the investment a medium to high risk one. A withdrawal is allowed only after 12 months of investing but will be subject to a penalty fee.           

There are no fees incurred, it is simple, secure, easily accessible and affordable and can be bought electronically, via the internet, on the RSA Retail Savings Bonds website.

The return on investment on Treasury bills is generally lower because of the shorter maturity period. Whereas Treasury Bonds offer a higher return because of their longer maturity period.


5. Property Investing

Property investment is a purchase of land or a building (even a part of a building) with the intention to earn rentals or capital appreciation, or both. As the owner, you will occupy the property to ensure that you earn money from it.

The highest risk involved in property investment is bad tenants. If you are considering this type of investment, be sure to be clear about the legalities around leasing your property to ensure maximum security and return on your investment.

If you are not sure how to get started, here are some useful tips.  

Owning a property can be a great way to earn a passive income and generate a terrific return on your investment. The income is earned from rental income and the appreciation of your property’s value.


6. Stocks

Stocks are one of the most popular investment options of them all.

Investing in stocks is simply buying shares of ownership in a public company.

The minimum investment amount varies depending on the share or asset class you want to buy. But lately, investment platforms offering fractional share investment options make it possible for anyone to buy stocks.

The income made from investing in shares comes in 2 forms:

  1. Capital Growth ​
  2. Dividends​


Dividends are rewards or payouts paid to investors/shareholders by a company. It is a portion of its profits. 

It is worth mentioning that companies are not obligated to pay out dividends, even when they are profitable. 

Capital growths are earned when stocks are sold. If the stocks do not perform well, there is a risk of a loss. Dividends are usually paid out annually or biannually.

Here is a list of companies currently trending in the SA stock market.

We recommend doing some research or playing around with a demo accounting to get familiar with investing in stocks.


7. Bonus: Crypto

Nearly as daunting if not more so as the idea of purchasing stocks, cryptocurrency continues to pique the interest and indifference of investors.Cryptocurrency is a digital currency designed to work as a medium of exchange.

With the ability to  generate astronomically high returns very quickly it is a very attractive investment tool.  The high returns in this instance is almost guaranteed to come with an equally high risk.

If you are enticed by the Cryptocurrency universe, here’s a useful piece of advice from the experts: “Start small and only use money that you can afford to lose.” 

With the move to get financial companies in South Africa trading in cryptocurrency to apply for a license between June 1 and Nov. 20, 2023, in order to operate legally, the space will be better and more strictly regulated. 


Balancing your investment portfolio

Diversify it! Each of us will have a different investment portfolio because it is something that is based on our personal financial situations

 Factors such as your risk tolerance, goals, and increased investment interests will be considered. When starting out, remember to keep the risk as low as possible.

Investment portfolio balancing

Final thoughts

Which option suits your profile best?

Pick up a finance book, speak with- or listen to experts, you can save and invest and watch your money grow.

Doing the prep work will ensure that you don’t lose money on riskier investments.

Do you know whether you qualify?

Find out if you’re eligible to reduce your debt and protect your belongings.

Disclaimer: This website and any information herein is not intended to be, nor does it constitute, financial, tax, legal, investment, credit, or other advice. Before making any decision or taking any action regarding your finances, you should consult a qualified professional directly.

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