Regular vs. once-off savings deposits

Topping up: Regular vs. once-off deposits

When you open an investment or savings account, the ultimate goal is to save as much money as you can over a certain period of time. Achieving this is easier said than done though, with many factors being out of your control. However, there are a few things you can do to get the most out of your money, one of which is to decide how you want to top up your savings – with small, monthly amounts or larger but less regular deposits?

Each has its own benefits and downsides and the right option for you depends on your personal financial situation.

Regular deposits

Some prefer to create a savings account and deposit small amounts of money into it, usually every month. Because the monthly payments are typically small and manageable, this is the option a lot of people go with. It's a great way to save for those who struggle to put money away – if you open a savings account and set up a debit order for it, the temptation to use the money is eliminated because it goes into your savings account before you have the chance to spend it.

The main shortcoming of this kind of saving technique is that you may make less return on your investment in the long-term than you would with larger, less regular deposits.

Once-off deposits

A once-off deposit of a higher amount often performs better over the long-term than smaller, regular deposits. This is because you start earning interest immediately on this higher amount, rather than waiting months or even years for the money in your account to grow to a sizeable amount (as you would with a debit order account).

The downside to this is that many people simply can't afford to invest large sums of money, so for many South Africans this method may not be realistic.

Which way to save is best?

There is no right or wrong decision as long as you are saving something. The choice comes down to your personal circumstances – do you have a large sum of money to deposit? Can you afford monthly payments into an account? What are you saving for and for how long? Do you have a savings goal in mind? All of these factors will determine whether to invest a lump sum or open a debit order savings account.

However you decide to save your money, the important thing is you are taking steps to secure your future financial wellbeing. If you haven't yet started, it's never too late to save! Use our savings account comparison tool to find a savings solution that suits your financial situation and maximises the returns on your hard-earned money.

Prices quoted are correct at the time of publishing this article. The information in this article is provided for informational purposes only and should not be construed as financial, legal, or medical advice.