Vincent Hargreaves, Milnerton
If you have a fixed investment, make sure that the rate offered for the term is compound and not simple interest.
An example of the difference in payout over five years with capital, plus interest at end of five years: Institution A – R100 000 at 9.75% (simple interest), payout is R148 750; Institution B – R100 000 at 9.75 % (compound semi/annually) payout is R160 960.
My advice is before committing your funds, ensure the institution provides you with end term payout so that you can make an informed decision.
