i What this calculator does
With the repo rate at 7.25% and prime at 10.75% after the September 2026 increase, cash pays meaningfully more than it did. That raises the bar any market strategy has to clear before it is worth the risk.
This compares a fixed deposit against an assumed market return, both after tax and after inflation, so the comparison is in the same units. The interest exemption of R23,800 a year under 65, or R34,500 from 65, is applied.
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
What is the interest exemption?
SARS exempts the first portion of local interest from income tax each year, R23,800 for taxpayers under 65 and R34,500 from 65. Interest above that is taxed at your marginal rate, which is why large cash holdings become less attractive as they grow.
Is a fixed deposit really risk free?
It carries no market risk and the rand amount is contractual, but it carries inflation risk: if the after-tax return is below inflation you lose purchasing power with certainty. It also carries bank credit risk, which South Africa's deposit insurance scheme now partially covers.
Why is the market return taxed differently?
Interest is ordinary income taxed in full at your marginal rate. A capital gain has an annual exclusion and only 40% of the remainder is included in taxable income for individuals. That difference favours the market side even before returns are compared.
What return should I assume for the market?
Nobody knows. Long-run equity returns in South Africa have historically been meaningfully above inflation, but any particular five-year period can be negative. Run the calculator at several assumptions rather than one, including a return below the deposit rate.
Does this apply to a tax-free savings account?
No. Inside a TFSA both interest and capital gains are exempt, which changes the comparison entirely. If you have unused annual allowance, using it first is almost always better than either option here.
Where does trading fit in?
Trading profits treated as revenue are taxed at your marginal rate with no exclusion, which puts them on the least favourable side of this comparison. That is worth weighing against the return a strategy needs to produce.
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