Fixed Bonds guaranteed growth and certainty for 5 years

Fixed Bonds provide a guaranteed, fixed growth rate over a five-year term, with both your capital and the maturity value backed by the Life Company. You lock in today’s rate at the start, know your exact payout upfront, and avoid market volatility. That certainty helps you plan without guesswork.

How a Fixed Bond works

When you invest in a Fixed Bond, your lump sum is placed for a single five-year term at a rate set on the day your policy starts. The growth is guaranteed and quoted net of tax within the policy, so the maturity value you see at the outset is the amount you will receive at the end of the term.

The guarantee is provided by the Life Company. Any guarantee is only as strong as the provider, and the Life Company’s capital strength underpins both your invested amount and the growth shown at the start. Your outcome does not depend on market movements or external asset managers.

A simple example in rands

As an illustration only: if you invested R100,000 at a fixed net rate of 7% a year for five years, your maturity value would be about R140,255. The actual rate you receive will be the one quoted when your Fixed Bond starts, and your guaranteed maturity amount will be shown in rands on your policy schedule.

The example is for information only, not advice. Ask for a personalised quote to see your exact guaranteed maturity value.

Who should consider this

Fixed Bonds are aimed at conservative investors who want a guaranteed return without exposing capital to market risk. They also work as a temporary parking vehicle for funds while you plan your next move, especially if you expect interest rates to decline and want to lock in today’s levels.

• You want certainty about the rand amount you will receive on a fixed future date.

• You prefer capital security over market-linked growth.

• You value tax-efficient, net-of-tax quoted returns with no surprises at maturity.

• You are comfortable committing funds for five years without needing regular access.

Fixed Bonds are not suitable if you require liquidity during the term or if you want exposure to higher, but uncertain, market growth.

Why guaranteed certainty matters

With a Fixed Bond, the outcome is pre-quantified. That means you can align the maturity date and payout with a specific goal, such as a home deposit, a child’s education, or a business expense. There is no need to forecast markets or track unit prices, because your return is set on day one.

This certainty also acts as an interest rate hedge. If rates fall more than expected, your return does not change. You continue to earn the guaranteed rate you locked in, protecting you from a lower-rate environment.

About the guarantee

Many products quote target maturities that depend on how underlying assets perform. Fixed Bonds are different: the capital and growth are guaranteed by the Life Company itself, not by third-party managers. As always, a guarantee is only as strong as the provider’s financial strength.

Tax and fees in plain language

Fixed Bond rates are quoted net of the policy’s tax, and the guaranteed maturity value is not taxable in your hands. You see your outcome upfront and, provided you stay to maturity, that figure is what you receive. This removes uncertainty about after-tax returns.

• No income tax due on the maturity amount you receive as policyholder.

• No capital gains tax in your hands at maturity for this policy-based structure.

• The displayed rate is after policy-level tax, so there is no dilution later.

• Advice fees can be built in or paid separately; if deducted from the bond, they will lower the maturity value shown on your quote.

Practical details you must know

The investment term is fixed at five years. You should invest money you can set aside for the full term, because early access is either unavailable or may require a surrender that reduces your payout. Think of this as a time-locked commitment in exchange for certainty.

You invest a single lump sum in rand. The Life Company confirms your guaranteed maturity value in writing before you proceed. Once issued, your rate and maturity amount are locked for the term.

Getting started is straightforward: request a personalised quote, review the guaranteed maturity value and any fees, and complete the application with your adviser or directly with the Life Company. Keep your policy schedule safe; it states the date and the rand amount payable at maturity.

How Fixed Bonds complement a plan

Fixed Bonds can sit alongside flexible savings and market-linked investments. They bring stability to a portfolio by ring-fencing part of your capital for a known future payout. This blend helps many investors meet near- to medium-term goals while leaving long-term growth to diversified market assets.

If you are unsure whether to prioritise certainty or growth for your goals, speak to a licensed adviser. An adviser can help you match timelines, risk tolerance, and liquidity needs to the right mix of solutions, including a Fixed Bond where appropriate.

Key take-out: Fixed Bonds give you clarity in rands from day one. If rates fall, your return holds. If markets swing, your outcome does not. For many South Africans, that is the calm corner of a financial plan.