Investments options and the easiest way to save money

Option	Minimum term	Pro’s	Con’s
Endowment – SA Debit order – R500pm min Lump sum – R25 000 min	5 years	Tax advantage – pays out tax-free after 5 years Great for estate planning, can nominate beneficiaries Great for goal-based investing, forces you to stay on course (holidays, education)	Minimum 5 years, significant penalties when you withdraw before then Flexibility – can only increase the premium by 20% per annum and only lump sums in the first year
Flexible Investments Debit order – R1 000pm min Lump sum – R50 000	None (open-ended)	Very flexible, can stop debits anytime, activate anytime, do lump sums, increase and decrease debits Wide variety of funds to choose from Low fees	People tend to withdraw regularly, so never really seeing the value of compounding Forms part of your estate and cannot nominate beneficiaries
Tax-Free Savings Debit order – R500pm min Lump sum – R36 000 (per year)	None (open-ended)	Growth is taxfree and the withdrawals as well Very flexible, can stop debits anytime, activate anytime, do lump sums, increase and decrease debits Wide variety of funds to choose from Low fees	People tend to withdraw regularly, so never really seeing the value of compounding The real value of tax-free only seen after 10 years of regular investing Limits to what you can contribute per year (R36 000)
Offshore Flexible Investments	None (open-ended)	Hard currency investment Very flexible, can stop debits anytime, activate anytime, do lump sums, increase and decrease debits Wide variety of funds to choose from Low fees Suitable for people who travel overseas a lot and for kids studying overseas	Admin High minimums – US$10 000 lump sum & $2500 Debit orders $200pm Tax – taxed locally Estate planning – You might need a foreign will as well. Foreign executors charge extremely high fees.
Offshore Endowment	5-year minimum (open-ended after 5 years)	Hard currency investment Wide variety of funds to choose from Low fees Good for people who travel overseas a lot and for kids studying overseas Estate planning – no foreign will needed Tax – taxed within fund	Admin High minimums – US$10 000 lump sum Debit orders $200pm Flexibility

The easiest way to save money