Best bank for Small businesses

[Miro Bagrov]

Ah, I would have suggested, before withdrawing money, move it to an investment account ("call account"), and then withdraw it. This means no cash withdrawal fees. Sometimes, I am aware banks give you several free withdrawals though. Another trick is to use cash deposits to pay creditors and overheads, because then you don't carry transfer fees. That's if you could position the accounts so that you have an account that receives deposits for free, makes withdrawals for free. Actually, there are hundreds of tricks. So yes, very individual based stuff.


This might help some people:
An old lady asked me to give her a list of the best place to invest "long term" with "no risk" to the value. It gives an idea of the difference between banks.
On close inspection we can see that the "Big 4" offer the lowest rates.

Investment Analysis

Assumptions:
Amount +/- R 20 000
Term: Long Term (excludes all short term investments)
Risk: Very Low
Date: 14 September 2011

Investment Name Interest Rate
ABSA Fixed Deposit (7 - 11 months) 5.16%
ABSA Fixed Deposit (12 months) 4.96%
Postbank Term Save (Post Office) 5.45%
Bidvest 121 day Notice 6.50%
Bidvest Fixed Deposit (12 months) 5.60%
FNB Fixed Deposit (12 months) 5.22%
FNB Fixed Deposit (24 months) 5.52%
FNB Seniors Fixed Deposit (12 months) 5.75%
FNB Seniors Fixed Deposit (24 months) 6.08%
FNB Flexi Fixed Deposit 4.25%
Standard Bank Fixed Deposit (12 month) 5.05%
Standard Bank Fixed Deposit (24 month) 5.50%
Standard Bank Fixed Deposit (48 month) 6.55%
Standard Bank Market Link 3.82%
RSA Retail Bonds 2 years (PostOffice) 7.25% (Fixed Rate)
RSA Retail Bonds 3 Years (PostOffice) 7.50% (Fixed Rate)
RSA Retail Bonds 5 years (PostOffice) 8.00% (Fixed Rate)
RSA Retail Bond 3 year Inflation Link Inflation + 2.75% (Currently Inflation = 5.3%)

Please Note:
1.FNB is offering Fixed Deposits specially for seniors
2.Government Retail Bonds offer seniors the right to receive their interest monthly into their bank accounts
3.Interest payments can be sent into an account or re-invested with most investments.
4.Fixed Rates will remain constant throughout duration, the others can change
5.Inflation at the moment is 5.3%
6.I forecast inflation to rise for the next 2.5 - 3 years, then drop again.

I would suggest investing in government bonds since they offer the highest return.
(The interest rates on government bonds are expected to increase over the next 2 years, the highest ever has been 11.5%. The best strategy might be to invest in the bank for a year or two then to take the money + it's interest and move it to a fixed rate RSA Retail Bond @ roughly 9.25% - 10%.)

Regards,
Miro Bagrov