Dennise Williams, Staff Reporter
SUNDAY BUSINESS has been following the financial trials of Isabell Stewart, a 40-year-old secretary who has suddenly realized that she has no savings or investments.
One piece of advice that was given by financial experts was that she should find a way to put away at least $3,000 each month. Now that's all well and good.
But what Ms. Stewart needs is the practical application of this advice. So the real question is, when you trim your budget and find some extra money, where do you invest or save it?
In Part 2 of this series (January 25th), we demonstrated the potential growth of only $2,000 invested properly. Within nine years, the funds could grow to $470,691 depending on the rate of interest the investor receives. And that is just with $2,000 put away each month.
Imagine the wondrous effect of adding on $1,000 more on one's bank balance. And so, because we care so much, Sunday Business has done the legwork for her. We present some options below for Ms. Stewart to either save or invest her hard-earned funds.
Note that Sunday Business makes no recommendations in terms of which financial institution Ms. Stewart should do business with; we are only presenting what the particular financial institution informed us that they offer.
COMMERCIAL BANKS
RBTT PARTNER PLANThis product runs similar to the traditional partner for a period of 16 to 48 weeks. A tax-free bonus is paid at the end of the period.
REGULAR SAVINGS
For a savings of $3000 the interest rate is 2 per cent per annum, but as your savings grow, so does the amount of interest paid.
FIRST CARIBBEANINTERNATIONAL BANKMONEY TREE
A savings and insurance product, the minimum opening balance is $500 and interest of 12.5 per cent per annum is paid. The insurance coverage is $500,000 on death.
REGULAR SAVINGS
On savings of $3,000 interest of 8.25 per cent is paid per annum.
CREDIT UNIONS
CITY OF KINGSTON CO-OP CREDIT UNIONFor members of COK, their fixed deposit account pays 14 per cent per annum and their Golden Egg account pays 12 per cent per annum.
CHURCHES CO-OPERATIVE CREDIT UNION With $3,000 to start, Ms. Stewart can open an Earner Plus account with the interest calculated daily and paid monthly at five per cent per annum.
MERCHANT BANKS
DB&G MERCHANT BANKFor persons with $3,000 to start, a regular certificate of deposit (CD) is recommended. It pays 10.50 per annum for 30 days and can be added to at anytime.
PAN CARIBBEAN MERCHANT BANKThis institution offers a Super Investment Savings Account (SISA), which pays 9.5 per cent per annum.
INVESTMENT HOUSES
Now, savings and CDs are not the only options available to Ms. Stewart. As previously stated, the Jamaica Stock Exchange (JSE) is the place advisers suggest placing funds for the greatest capital appreciation.
However, note that there are fees to get into the market and fees to get out.
Additionally, you can lose your investment as the price of the stock you invest in can nosedive. However, as the risk is great, so too, advisors say are the rewards.
CAPITAL & CREDIT SECURITIES Small investors can invest $3,000 however, about $300 in fees will be assessed. An adviser will direct the investor on the particular stocks to choose.
JMMB SECURITIES This financial boutique offers an account called the EMMA account, where one deposits their funds at 15 per cent per annum and can build up the account until it reaches a level that the investor feels confident to place in the JSE.
However, if with the first $3,000 she saves, Ms. Stewart wants to jump right into the JSE, she will be assessed a minimum fee of $100.
