"Money market accounts offer security" - GoBanking and Justmoney.co.za advise
31 January 2008 · Staff Writer
With global and local stock markets experiencing high volatility and property prices stalling, many South Africans have been left wondering how to protect their money while still earning inflation beating returns
According to Toby Wooldridge, Head of Go Banking, people with some extra money may want to consider safer investment options until the waters calm down, such as the GoAccount from GoBanking.
"One such option is a money market investment account," says Wooldridge. The money market is an instrument of the fixed income market. Money market securities are essentially IOU's issued by governments, financial institutions, and large corporations and provide a stable return to investors. They are considered extraordinarily safe but because they are extremely conservative, money market securities generally offer lower return than most other securities.
However, in the current economic climate, returns on money market accounts could outperform more risky investments. The yields on money market securities are linked to interest rates. So while rising interest rates are hurting consumers who are in debt, they are providing good returns for money mmarket investors.
According to Wooldridge, when looking for a money market investment account, look for the following:
According to Justmoney.co.za, South Africa's online guide to money, it is vital that people understand how a product works before they invest their cash in it.
Paul Beadle, general manager of Justmoney.co.za, explains: "In such a volatile economic climate, it is important that people save more - but the choice of savings options can be confusing."
Beadle says it is also crucial that savers choose financial products that are transparent and fair because it helps them to better understand what they are getting, so they can compare different accounts and find the best place for their money.
"An account such as the Go Account offers people a way to protect their money and beat inflation," says Beadle. "It is a high-interest earning account that you can use like a typical current account; it is linked to the money markets, so your cash is safe and your earnings are maximised; and it has probably the lowest fees and charges in the marketplace."
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