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The longer you can avoid dipping into your savings, the greater your range of investment choice. When markets are volatile, as they have been in recent years, you need to be realistic about the time horizon of your investments to get the most from them. Knowing how the time frame of different types of investments affects savings outcomes can help investors choose the most appropriate investment vehicle to earn the best possible growth. The savings levels of working South Africans are low at just 15% of their income. But according to the Old Mutual Savings Survey, savings for the entire population are even lower at just 3%, reflecting the country’s overall low savings rate. Investors often choose bank fixed-deposit accounts and money-market funds, as both benefit from set interest rates and provide fairly easy access to savings. Average 12-month interest rates for fixed-deposit accounts from SA’s four biggest banks are currently about 5.5% to 7.5%. Average money-market rates are abou...

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