The latest move by FNB shows that there is a desire to save among South Africans when they are offered a cost-effective and convenient way to do so.
"The take up of Bank Your Change shows that there is appetite among South African households to save, provided there is a cheap and easily accessible tool to do so," says Shane French, FNB Head of Consumer Products.
Bank Your Change is a new feature available on most personal cheque accounts, and makes use of the linked Savings Pocket. This feature is an innovative way for customers to automatically save their "left over" cents when they swipe their FNB cheque card or debit card at any point of sale terminal.
This innovative offering is a South African first; FNB is the fifth bank worldwide to implement such a service.
Bank Your Change works this way:
- When you make a purchase at a point of sale terminal using your FNB cheque card or debit card, the purchase amount is rounded up to the nearest rand. The difference in the rounded-up amount and the purchase price is then transferred into the customer's linked Savings Pocket free of charge.
- Should you want to save more, you are able to select a top -up amount of R2.00, R5.00, R10.00 or R20.00 - this amount is then added to the cents saved per purchase and deposited in the linked Savings Pocket.
- Like any form of savings, the funds in the Savings Pocket earn interest. Transfers between the personal cheque account and the linked savings pocket are also free.
South Africa's saving rate is low. Its gross savings rate as a proportion of Gross Domestic Product (GDP) rose to 17.1 percent at the beginning of 2009. SA's saving rate is low by international standards and compares especially poorly to countries like China where the gross saving rate is in excess of 40 percent.
Household savings as a proportion of GDP has declined over the last 15 years, from 3.2 percent during the 1980s to 0.2 percent between 2000 and 2008. As a percentage of disposable income, household savings have fallen from around 5.4 percent in the 1980s to 0.28 percent between 2000 and 2008.
What this means is that the average South African saves only 28 cents of every rand available.
You can sign up for a FNB cheque account by clicking here.