A double-digit rate and zero fees

With July being National Savings Month, now is the time to kick-start your clients’ savings goals, no matter where they are in their financial journey. Michael Field, GM: Investments at Fedgroup, sheds some light on savings and provides some methods to boost your clients’ savings. 

Starting your savings journey

There are many savings products available in the market that can help your clients achieve their savings goals such as tax free savings accounts (TFSA). A TFSA is an excellent savings vehicle that allows investors to save for just about anything up to a lifetime total of R500 000, tax free.  So, what are the primary benefits of choosing a Tax-Free Savings Account (TFSA) with Fedgroup? Field notes that Fedgroup has focused on simplicity allowing investors to gain access to very stable assets that should outperform most other asset classes. “In the interest of simplicity and encouraging investors to start their investment journey, we charge no fees.”

He adds that stability in Fedgroup’s savings products are instilled by using a specialist structure and investments in specialist assets that offer lower volatility and lower risk compared to some other asset classes out there. “We use diversification as another key factor to achieve more stability in the long run. And then there is the gift that keep on giving - compound interest.”

He adds that  lower volatility is due to the portfolio not being directly linked to market interest rates, but interest rates can affect how underlying assets might perform. "Importantly, they have intentionally low correlation, meaning they are not affected by market sentiment. This is part of the reason they have low volatility."

So, what makes Fedgroup’s TFSA different? 

The simplicity of the Fedgroup TFSA lies in the slightly different structure used to allow clients to access a broader range of assets which assists them in achieving the lower volatility return yet remains simple.

Field adds that the best strategy when it comes to saving is time, but that you should start as soon as you can, so invest as much as you can afford as soon as you can to allow returns to compound.

Fedgroup’s digital tools and platforms assist with managing a TFSA very effectively. Their user-friendly app makes it easy to invest and view your investment as it grows. Fedgroup has been around since 1990 and has always stood for stability, simplicity and products that offer inflation-beating returns. This product is a continuation of that legacy.

Field recommends ensuring that you encourage your clients to make the most of their TFSA contributions each year to achieve their financial goals. “Invest as much as possible as soon as possible. It is also critical to make sure they don’t withdraw if they can avoid it because there is a lifetime limit of how much investors can put in and they should try to maximise this in their lifetime.”

While it’s not a magical product, it’s simply compound interest at work. Starting your client’s savings journey with a Tax-Free Savings Account (TFSA) at Fedgroup offers simplicity, stability, and the potential for significant returns through the power of compound interest and diversification.

Fedgroup Financial Holdings (Pty) Ltd is a licensed controlling company and companies within the Group are authorised FSPs.