During times of market turmoil and negative sentiment, many investors’ instinct is to seek out the most secure investments to weather the storm. Investors in South Africa are always on the lookout for ways to get the high returns on their money with the least amount of risk. They are primarily concerned with obtaining the best feasible risk-to-reward ratio.
When the stock market is not experiencing a bull run (as it is right now), lower-risk investments with higher returns become more appealing. It may be time to look into some of South Africa’s safest investments instead of merely keeping your money in a regular savings account.
In this article, we’ll look at 10 of the best safe investments in South Africa for 2023. Short-term and long-term investments are included in the following list. These high-return investments can help you safeguard your capital in times of volatility, regardless of whether you’re a new or seasoned investor.
When we talk about high returns on a low-risk investment, we mean an investment that may generate a larger return than simply keeping your money in a typical savings account. Savings accounts, as we all know, pay relatively little interest. In truth, the bulk of savings accounts at major institutions such as FNB and Standard Bank pay interest rates much below 2%, with some paying nothing at all (think 0.10%).
Given that Satrix 40, an ETF that tracks the FTSE/JSE Top 40 index, which includes the 40 largest companies on the JSE ranked by investable market cap, has returned an average annual return of about 13% over the past 15 years, there are clearly better places to invest your money than in a bank account, which lags inflation by a wide margin.
Low-risk assets with “high” returns are frequently appropriate for short-term investing. If you are risk averse, they may be better solutions. When discussing some of the top long-term investments in South Africa, we notice a higher risk profile for a potentially bigger gain.
Are you looking for a place to park your cash right now that will provide you with best returns? Here are 10 of South Africa’s most secure investments at the moment.
Treasury Bills are short-term debt instruments denominated in South African Rands (ZAR) that are sold at a discount to par and carry no coupon. Treasury Bills are issued to the market at different maturities, from 1 day to 12 months. Treasury Bills are redeemable at par on maturity. 
South Africa’s Treasury Bills are among the safest investments available, they have faily high returns for a conservative investor. Provincial and federal governments issue these to raise capital. The National Treasury issues Treasury Bills on behalf of the Minister of Finance as a representation of the Government of the Republic of South Africa.
The South African Reserve Bank (SARB) is authorized to receive and process applications for the issuance of Treasury Bills on behalf of the National Treasury. As the National Treasury’s registrar and settlement agent, the SARB is authorized to receive and make payments on Treasury Bills.
Money Market Funds are a form of mutual fund that invests largely in assets with high liquidity and short-term maturity. A Promissory Note, a financial tool that allows investors to lend money to corporations or banks with a defined interest rate and monthly installments, is one such example.
Bankers’ Acceptance is another type of money market fund. This investment provides a steady income stream over a variety of time horizons. One of the drawbacks is that it often demands a substantial investment, typically R1 million or more, in order to get started. An alternative to the Promissory Note, the Commercial Paper, is an unsecured kind of debt. Short-term loans to businesses or financial institutions at a fixed interest rate are the most common use for this product.
Money market accounts and funds are frequently thought to be less risky than stock and bond investments, they also tend to come with high returns.
An RSA Retail Savings Bond is an investment with the government of South Africa that earns fixed or inflation-linked interest for the term of the investment. 
Types of RSA Retail Savings Bonds
Fixed rate retail savings bond series with terms of two, three, and five years. Fixed Rate Retail Savings Bonds pay a market-related fixed interest rate on interest payment dates until maturity. Different interest rates apply to each maturity in the series. The Inflation Linked Retail Savings Bond series consists of bonds with maturities of three, five, or ten years. Capital invested in Inflation Linked Retail Savings Bonds is inflation adjusted over the period, and a floating interest rate is paid every 6 months on the interest payment dates.
The least amount that can be invested is R1 000.00, and the maximum amount that can be put is R5 million.
In South Africa, a fixed annuity is a type of insurance contract that guarantees the purchaser a precise, fixed interest rate on their money. A variable annuity, on the other hand, pays interest that fluctuates dependent on the success of an investment portfolio selected by the account holder.
In South Africa, fixed annuities are among the most secure long-term investments. Typically, these are granted by banks or insurance firms. They give consistent, typically monthly payments over a number of years. The majority of retirees use annuities to generate income throughout their golden years.
These are dependable and secure investments for senior citizens in South Africa, and even if you die before they mature, your beneficiaries may be entitled to a dividend.
Stocks that pay dividends are one of the most popular and secure investments among South African investors. These are shares of publicly traded firms on the Johannesburg Stock Exchange that regularly distribute a portion of their income to shareholders as a cash dividend. The majority of dividend stocks represent blue-chip, highly successful corporations in industries such as mining, finance, and real estate.
Real estate investment trusts (REITs) are a popular investment option in South Africa. They offer investors the opportunity to invest in income-generating properties without the hassle of owning and managing the properties themselves. REITs are also a way to diversify your investment portfolio and potentially earn higher returns than traditional fixed-income investments.
REITs are essentially investment funds that own and manage income-generating properties such as offices, shopping centers, warehouses, and residential buildings. These properties generate rental income, which is then distributed to investors in the form of dividends. REITs are required to distribute at least 75% of their taxable income to investors, which means that they typically offer higher dividend yields than other types of stocks.
In South Africa, REITs are regulated by the South African REIT Association (SA REIT), which ensures that REITs comply with certain standards and transparency requirements. To qualify as a REIT in South Africa, a company must distribute at least 75% of its taxable income to investors, have at least three properties in its portfolio, and generate at least 75% of its income from rental property.
There are several benefits to investing in REITs in South Africa. Firstly, REITs offer diversification, as they invest in a variety of properties across different sectors and locations. This helps to mitigate the risks associated with investing in a single property or location. Additionally, REITs offer the potential for higher returns than traditional fixed-income investments, as they generate rental income and can also appreciate in value over time.
Another benefit of investing in REITs is that they are relatively easy to buy and sell. They are traded on the Johannesburg Stock Exchange (JSE) and can be bought and sold through a stockbroker or online trading platform. This makes them a convenient investment option for both individual and institutional investors.
However, it’s important to note that investing in REITs does come with risks. REITs are affected by factors such as interest rates, property prices, and occupancy rates. Additionally, like any other stock, the value of a REIT can fluctuate based on market conditions and investor sentiment. Therefore, it’s important to do your research and assess your risk tolerance before investing in REITs.
Unit trusts are a popular investment option in South Africa, allowing individuals to pool their money together and invest in a diversified portfolio of assets such as stocks, bonds, and property. Unit trusts are managed by professional fund managers who make investment decisions on behalf of the investors, aiming to achieve the best possible returns.
According to the Association for Savings and Investment South Africa (ASISA), the South African unit trust industry had a total net asset value of R2.9 trillion as of December 2021. This represents a significant growth from R2.3 trillion in December 2020. The industry has seen significant growth in recent years, as more South Africans are looking to invest in a diversified portfolio of assets.
There are several benefits to investing in unit trusts in South Africa. Firstly, unit trusts offer diversification, as they invest in a variety of assets across different sectors and geographies. This helps to mitigate the risks associated with investing in a single asset or sector. Additionally, unit trusts offer the potential for higher returns than traditional fixed-income investments, as they invest in a range of assets that can appreciate in value over time.
Another benefit of investing in unit trusts is that they are relatively easy to buy and sell. They are traded on the Johannesburg Stock Exchange (JSE) and can be bought and sold through a stockbroker or online trading platform. This makes them a convenient investment option for both individual and institutional investors.
Investing money in South Africa is difficult for novices. With so many investment possibilities available, it is tough to identify which assets are the most secure. In addition to purchasing mutual funds from your bank, opening a brokerage account with a bank or brokerage like EasyEquities is the simplest method to get started.
Brokers may offer minimal or even no commission trading fees, which can be advantageous for long-term gains. In addition, they can offer all or a portion of the key investment assets, such as stocks, ETFs, mutual funds, bonds, and cryptocurrencies.
Exchange-traded funds (ETFs) are a popular investment option in South Africa, offering investors the opportunity to invest in a diversified portfolio of assets at a relatively low cost. ETFs are investment funds that trade on stock exchanges, allowing investors to buy and sell them like any other stock.
According to the Johannesburg Stock Exchange (JSE), there were 89 ETFs listed on the JSE as of December 2021, with a total market capitalization of R116.7 billion. The number of ETFs listed on the JSE has grown significantly in recent years, providing investors with a range of options to suit their investment goals and risk profiles.
ETFs offer several benefits to investors in South Africa. Firstly, they offer diversification, as they invest in a range of assets such as stocks, bonds, and commodities. This helps to mitigate the risks associated with investing in a single asset or sector. Additionally, ETFs are relatively low-cost compared to actively managed funds, as they track a particular index or sector and require less management.
Another benefit of investing in ETFs is that they are relatively easy to buy and sell. They can be bought and sold through a stockbroker or online trading platform, and the transaction costs are generally lower than other types of investments.
Corporate bonds are a type of debt security issued by companies to raise capital. Investors who purchase corporate bonds lend money to the company, and in return, receive periodic interest payments and the return of their principal when the bond matures. Corporate bonds are considered a relatively low-risk investment compared to stocks, as they are backed by the company’s assets and cash flows.
According to the Johannesburg Stock Exchange (JSE), the corporate bond market in South Africa had a total market capitalization of R568.8 billion as of December 2021. The corporate bond market has seen significant growth in recent years, offering investors the opportunity to invest in a range of industries and sectors.
Investing in corporate bonds can offer several benefits to investors in South Africa. Firstly, corporate bonds provide a fixed income stream, with regular interest payments and the return of principal when the bond matures. This can provide a predictable source of income and help to mitigate the risks associated with other types of investments.
Additionally, investing in corporate bonds can offer diversification, as investors can choose to invest in a range of industries and sectors. This can help to mitigate the risks associated with investing in a single company or sector.
Peer-to-peer (P2P) lending is a relatively new investment option in South Africa, where investors lend money to individuals or businesses through an online platform. P2P lending is also known as crowdfunding or marketplace lending.
According to the South African Reserve Bank (SARB), P2P lending platforms in South Africa are regulated under the National Credit Act (NCA) and must be registered with the National Credit Regulator (NCR). The P2P lending industry in South Africa is still in its early stages, but it has the potential to offer investors higher returns than traditional fixed-income investments.
P2P lending platforms allow investors to lend money to borrowers who are looking for an alternative to traditional bank loans. Borrowers are assessed based on their creditworthiness and risk profile, and investors can choose which loans they want to invest in based on the borrower’s risk profile and the potential return.
According to the Peer-to-Peer Finance Association (P2PFA), the global P2P lending industry was worth $149 billion in 2020. While there are no official statistics available for the South African P2P lending industry, it is estimated to be a small fraction of the global industry.
Investing in P2P lending can offer several benefits to investors in South Africa. Firstly, P2P lending can provide higher returns than traditional fixed-income investments such as savings accounts or bonds. Additionally, P2P lending can offer diversification, as investors can choose to invest in a range of borrowers with different risk profiles.
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