How to maximise returns on savings when the interest rate is higher
"Higher interest rates mean that your savings will grow more quickly over time."
There are many great benefits for saving your money.
When life's uncertainties hit and you need financial backing, you can simply turn to your savings.
It can also help you achieve your long or short-term goals that require money.
READ: How To Make Sure You Save Every Month
The interest rate has an impact on your savings
Laurett Jardim from Avena Wealth, a company that offers investment management services, encourages savers to take advantage of the high interest rate that South Africa is currently dealing with.
"High-interest rates can have a positive effect on savings," Jardim says.
"When you deposit money into a savings account, interest income investments or invest in fixed-income instruments such as certificates of deposit (CDs) or government bonds, higher interest rates mean that your savings will grow more quickly over time," says the expert.
She add that "this can be advantageous for individuals looking to save or plan for retirement."
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However, she advises that one has to have good financial strategies that will see them getting greater returns on their savings.
"To navigate the effects of high-interest rates on debt and savings, it’s essential to adopt sound financial strategies. If you have debt, focus on paying it off as quickly as possible to minimise the impact of compounding interest. Consider making larger payments," she said.
Another way to ensure your savings give you the biggest returns is to look at different investment opportunities in several markets.
"For savers, take advantage of high-interest rate environments by researching and comparing savings accounts or investment options that offer competitive rates.
"Diversify your savings by exploring different investment vehicles, such as stocks or unit trusts, that can potentially provide higher returns over the long term," she adds.
Lastly, the financial advisor says it is important to seek professional help in order to make the best financial decisions.
She says a financial advisor will "provide personalised guidance based on your specific financial situation".
Not only that, but Laurett says the advisor will also "help you develop a comprehensive plan to manage your debt, grow your savings, and adapt to changing interest rate environments".
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