i What this calculator does
Paying an extra amount into your bond gives a guaranteed, tax-free return equal to your bond rate. Investing the same amount gives an uncertain return that is taxed. With prime at 10.75% after the September 2026 increase, that guaranteed return is high.
This compares both over the same period: the interest saved and the term shortened on one side, the after-tax investment value on the other.
This calculator is for educational purposes only. Results are estimates and may vary depending on market conditions, spreads, commissions, platform settings, and exchange rates. It should not be considered financial advice.
Frequently asked questions
Is paying off my bond really a guaranteed return?
Effectively yes. Every rand of capital repaid stops accruing interest at your bond rate, and that saving is not taxed. At a 10.75% bond rate, an extra payment is equivalent to a tax-free return of 10.75%, which a taxed investment would have to beat by a meaningful margin.
Does the money stay accessible?
It depends on the facility. An access bond generally lets you draw the extra payments back, which keeps the money available. A straight capital reduction does not, and re-borrowing means a new application. Check which one you have before committing a large amount.
Should I use the tax-free allowance instead?
Often yes, for part of it. Returns inside a tax-free savings account are exempt from income tax, dividends tax and capital gains tax, which removes the tax disadvantage from the investment side entirely. The annual allowance is capped and does not carry over.
What if interest rates fall?
A lower bond rate reduces the guaranteed return from extra payments, which shifts the comparison toward investing. The SARB raised rates in September 2026 and meets again in November, so the assumption is worth revisiting rather than fixing once.
Does this account for inflation?
Not directly, because both sides are affected similarly. What it does account for is tax, which affects only the investment side and is the larger distortion in this comparison.
Is there a middle option?
Yes, and most people take it. Splitting the extra amount between the bond and an investment gives a guaranteed partial return and keeps some exposure to market growth, without needing to be right about which wins.
Embed this calculator
Free to use on your own site. Copy the code below and paste it where you want the calculator to appear.
<iframe src="https://www.tradeanswers.co.za/embed/bond-vs-invest-calculator.html"
width="100%" height="750" style="border:0;max-width:520px"
title="Risk Per Trade Calculator - TradeAnswers" loading="lazy"></iframe>Calculator by TradeAnswers. More at the widget library.
