If you have some money to invest, don’t store it under your mattress where the only thing it will accumulate is dust. Rather find out: what are RSA retail bonds?
About RSA Retail Bonds
RSA Retail Bonds are issued by the government’s National Treasury as a way of financing the budget deficit of the government. Retail Bonds are one of the various types of financial services and investment opportunities that are used by personal investors, brokers, pension funds, banks, as well as foreign investors. RSA Retail Bonds are under the responsibility of the Asset and Liability Management sector of South Africa’s National Treasury. The Liability Management unit of this department is charged with managing the liquidity needs of the government.
It was in the 2003/2004 Budget Review that the Minister of Finance declared that South Africa’s National Treasury would introduce new retail bond securities to target a new source of funding for the government, to encourage the general public to save their money, and to increase the diversity of the market’s financial instruments.
There are two types of RSA Retail Bonds: RSA Inflation Linked Retail Savings Bonds and RSA Fixed Rate Retail Savings Bonds. Each of these RSA Retail Bonds are geared to making it simple and accessible for the general public to earn market-related, secure returns on the money they choose to invest. The RSA Inflation Linked Retail Savings Bonds will mature after 3 years, 5 years or 10 years; and the RSA Fixed Rate Retail Savings Bonds have a maturity of 2 years, 3 years, or 5 years.
Who is eligible for RSA retail bonds?
- You must be a permanent resident of South Africa.
- You must have a valid South African identification document.’
- You must have a South African bank account.
- If you are under the age of 18, you must receive consent from your parents in writing before investing (unless you have been granted majority status or you are married).
Now what you have the answer to the question “What are RSA Retail Bonds”, you may want to know: “How do I invest in an RSA Retail bond?” Simply put, there are three basic steps in the procedure; first, you need to register your relevant details at the National Treasury, then you can select the bond and maturity of your choice and apply for the retail bond. Lastly, you will pay for the accepted application.
1. Register your details
To start the application process for your RSA Retail Bond, you can go directly to the National Treasury at 240 Vermeulen Street, Cnr Andries and Vermeulen Streets, Pretoria, 0002 or call the department on (012) 315 5888. Alternatively, you can visit any South African Post Office Branch, or the RSA Retail Bonds website (www.rsaretailbonds.gov.za). However, if you are under the age of 18 and have not been granted majority status you cannot apply electronically on the website as parental consent is required in writing for you to apply. After the registration process, you will be given an investor number which can be used as a reference when you make payments to your RSA Retail Bond bank account.
2. Apply and select the bond and maturity
Like the registration process, there are a number of places you can select the bond type and maturity:
- Any Pick ‘n Pay branch
- The RSA Retail Bonds website (www.rsaretailbonds.gov.za)
- Any South African Post Office Branch
- You can also do directly to the National Treasury (240 Vermeulen Street, Cnr Andries and Vermeulen Streets, Pretoria, 0002) or give them a call on (012) 315 5888.
3. Pay for your RSA Retail Savings Bond
You can make a payment:
- At any Pick ‘n Pay Branch
- Via internet banking
- Through a direct deposit at the bank
- At any South African Post Office Branch.
If you choose to pay by cheque, the cheque must be made out to the place of payment. In other words, if you paid by cheque at Pick ‘n Pay, you must make the cheque out to Pick ‘n Pay.