Part 15 Retail bonds

A safe, secure and risk-free investment opportunity

RSA Retail Bonds are a savings product

issued by the South African government

and provide private individuals with the opportunity to invest in government-issued securities. Because these bonds are in effect "loan instruments" issued by the government to raise funds, they are backed by the credit of the government and represent a low risk investment

. Retail bonds give you an ideal opportunity to invest in the country's economy. By making retail bonds available to the general public, the government also hopes to create an awareness of the importance of saving.

Types of retail bonds

Retail bonds are available in three maturities: Two years

(the Two-year RSA Retail Bond), three years

(the Three-year RSA Retail Bond), and five years

(the Five-year RSA Retail Bond). The maturity

refers to the term of investment

, or the length of time before your investment capital is repaid to you. The retail bond you choose will depend on how long you want to save your money, and what the interest rates for the different retail bonds are at the time that you want to buy. Access to three different maturities allows you to choose the investment term to suit your needs.

Guaranteed returns

RSA Retail Bonds earn a fixed market-related interest rate

which is determined at the time of purchase. This interest rate is called the prevailing interest rate

. The three retail bonds, that is the two-year, three-year and five-year, each earn different interest rates, which are the prevailing interest rates on the date of purchase. Because the interest rate for retail bonds is fixed for the whole investment period, you know exactly what the return on your investment will be. You also have the option of reinvesting the interest at the same rate as the retail bond, thereby ensuring the guaranteed growth

of your capital.

Affordability

Retail bonds are very affordable. A minimum

of only R1 000

is required to purchase a bond. No fees, commissions or charges

are payable when buying these bonds, making them an even more attractive investment opportunity. The only charge is a penalty charge payable if you withdraw any portion of the amount before the expiry of the investment period.

How to get started

You can buy an RSA Retail Bond at any one of the following places:

- By purchasing online on the RSA Retail Bond website: www.rsaretailbonds.gov.za

- By posting an Application Form to the National Treasury: The Head, Asset and Liability Management Division, The National Treasury, Private Bag x115, Pretoria 0001

- At any post office.

If you wish to buy an RSA Retail Bond, you will need:

- A valid South African ID book;

- Your personal bank account details;

- A completed Application Form; and

- An amount of not less than R1 000.

Remember you need to be a South African citizen or a permanent resident to be able to buy an RSA Retail Bond.

For further information about retail bonds call the RSA Retail Bond Helpline at 012 315 5888

, or visit www.rsaretailbonds.gov.za