Three reader questions answered
You show 9.2% for gov bonds......on the gov site it shows just 9. I convert all the rates to effective annual rates. The gov site shows nominal rates. Which is 9%. But if you convert to effective annual rate, it is 9.2%. I do the same with all other banks. Some show nominal. Others show effective. Others again show both nominal and effective. Quite honestly, whether I show nominal or effective is not important. The important part is comparing the same type of rate across banks. Hope that makes sense.
To drive home this point. Check out the calculators on both the SA retail bonds website and my Fixed deposit calculator. Both calculators give the same total interest payouts for a given amount.
I am older than 55, what rate do I get for SA Retail Bonds? You do not get better rates if you are older than 55 for SA retail bonds. Only some banks give bonus rates. But even with bonus rates, they will not beat the current SA retail bond rate. Which is 9% (nominal) or 9.2% effective.
P.S If you are older than 60, SA retail bonds allow you to have monthly interest payouts.
And again I ask the question.....do you think SA retail bonds are safe enough. It is the safest option in SA. To coin it differently, it is safer than keeping your money under a mattress. Will the SA government ever default on its debt obligation? It is not impossible, but I do not foresee that they will default on their local debt obligations - especially to residents ie SA Retail bonds. In such a worst-case scenario, they would default on their USD-debt. On their local debt, the Reserve bank will almost certainly step in - as they have done to prevent a systemic collapse - and print enough money to allow the government to repay its local debt holders. If you are considering SA Retail bonds during retirements, there are far bigger risks to worry about than the government defaulting on SA retail bonds. Like inflation risk. That is the #1 risk you should worry about when it comes to ensuring your money lasts through your retirement.
Lastly how many times can one do the restart option.....do you know? You are able to restart indefinitely. However, you can only restart after one year.
Also remember there is a maximum amount you can invest with SA retail bonds of R5m.
PS these are my personal opinions and do not constitute financial advice.