Nedbank commits to helping SA youth go from short-term savings to long-term investment success

Nedbank commits to helping SA youth go from short-term savings to long-term investment success
Nedbank commits to helping SA youth go from short-term savings to long-term investment success. Image by ASphotofamily by Freepik

Youth Month in South Africa is a time to recognise the immense value and importance of the country’s young people in shaping its future. As we celebrate the youth’s potential and aspirations, it is crucial to recommit to supporting them in achieving their dreams and goals. Savings and investments are key ways for our country’s young people to build the strong foundations required to realise their ambitions, and Nedbank is dedicated to empowering, enabling and supporting them on this journey.

It’s a vital commitment from the bank, given the findings of its 2023 Consumer Tracker Survey, which provided some eye-opening insights into the savings and investment behaviours of South Africa’s youth. The research, which surveyed 1 744 young individuals, found that while an impressive 90% of participants have some form of short-term instant-access savings account, the numbers drop dramatically when it comes to longer-term savings and investments. Only 56% have a notice savings account, 46% have a fixed deposit, and only around a quarter of those surveyed say they have a retirement investment, and 24% invest in a unit trust.

All of which begs the question: Why aren’t more of our nation’s young people saving and investing for the long term? According to Babalwa Nonkenge, Head of Retail Investments from Nedbank , there are a number of possible reasons for this, and the survey sheds light on a few of them. “Low incomes and high living expenses are very real barriers, with 45% of respondents earning less than R5 000 per month, “Nonkenge says, “unemployment and income insecurity also play a role, given that only 55% of the young people sampled are gainfully employed.”

They also point to other possible reasons for the reticence of SA’s youth to save as being a tendency to focus on immediate ‘wants’ rather than long-term ‘needs’ and simply not realising the significant benefits of investing early, even with small amounts. “Young adults often lack education in personal finance management, leading to poor financial decisions and a focus on short-term spending over long-term investment planning,” Nonkenge says.

Nonkenge emphasises the importance of educating the youth on the benefits of starting their investment journey early. “Compound interest allows investments to grow over time through different economic cycles. By starting early, with small amounts one builds the healthy habit of regularly putting money away”

She highlights that Nedbank is committed to supporting South Africa’s youth in overcoming the barriers they face on their saving and investment journeys and helping them achieve success. The bank offers various investment solutions tailored to meet the needs and preferences of young adults, prioritising ease of access through digital platforms, cost-effectiveness, and competitive interest rates.

Nonkenge points to the Nedbank JustInvest account as a shining example of the bank’s commitment to combining ease, affordability and solid growth potential to provide a compelling case for young South Africans to become long-term investors. “JustInvest allows you to withdraw funds within 24 hours, charges no monthly fees, and offers a highly competitive interest rate of up to 8,75% per year,” She explains, “all of which makes it a very compelling investment proposition for young investors.” The JustInvest solution also requires a low minimum deposit of just R500, making it accessible to anyone who is just starting out on their financial journey.

“By empowering young adults with accessible investment options, transparent information, and personalised advice, Nedbank is helping to nurture financially informed young South Africans,” Nonkenge says, “and cultivate a new generation of savers and investors equipped to make sound long-term financial decisions that benefit them and the South African economy well into the future.”