If you’ve been paying attention to financial institution adverts recently, you may have noticed that instead of competing on fees, rewards programmes or credit products, banks are competing on something much less glamourous: savings rates.

TymeBank leads the way with double-digit rates, and rivals are following suit. For the first time in years, consumers can shop around for meaningful differences in savings rates.

The higher rates on offer, though, don’t change the underlying picture: the data shows most South Africans are still struggling to save.

What the data says about saving

The FinMark Trust has been tracking savings behaviour of South Africans for decades and has released its latest findings. Its 2026 FinScope dataset show the reasons why South Africans do not save, or more accurately, cannot save. South Africans have not stopped wanting to save, but they are finding it harder to afford it. Nearly one in two adults (48%) no longer save through any formal or informal mechanism.

Some other findings from the 2026 FinScope data released this month is available on the Eighty20 Data Portal:

• Saving remains a luxury for many. Formal saving becomes common only once monthly personal income exceeds about R8 000.
• Almost 30 million South African adults (about 65%) have no savings to fall back on when life takes an unexpected turn.
• Formal savings fell from 33% to 26% in the past year.
• Around 2.8 million South Africans keep their savings as cash at home
• Informal savings remain South Africa’s biggest savings system

The savings intention gap

Years of rising living costs, high debt burdens and slow income growth have left households under pressure. For many consumers, the monthly financial challenge is no longer deciding where to save but finding enough money to cover essentials.

❝ SARS approved R79.3bn in withdrawals from savings pots by end-February 2026, drawn by 5.6 million people

Two-pot withdrawal data bears this out. SARS had approved R79.3bn in withdrawals from savings pots by end-February 2026, drawn by 5.6 million people. 71% of claims were under R10,000, and the average claim size has fallen since the system launched, pointing to short-term liquidity needs rather than wealth-building. As Old Mutual’s Head of advice at Old Mutual Personal Finance Lizl Budhram relays, people are “juggling multiple and often conflicting financial priorities, from school fees and household costs to debt repayments,” thus not building savings.

Why are banks advertising savings rates now?

Banks are competing more aggressively on savings rates because deposits are valuable as banks use customer deposits to fund lending activities. A larger deposit base provides a stable, low-cost source of funding compared to raising capital elsewhere.

The reason it is becoming more notable now is digital banks, like TymeBank have changed the banking industry by reducing its expense ratios through a modernised operating model. Enabling lower fees and more importantly, higher interest rates for its clients. Without extensive branch networks and legacy infrastructure, newer entrants can pass some of their operational savings directly to customers. This has forced traditional banks to respond or risk losing deposits to more attractive alternatives.

What the banks are doing (June 2026):

South African banks are competing aggressively on savings rates as can be seen by some examples in the table below.

A typical South African way of saving through debt repayment

An interesting South African trend is emerging: For many South Africans, ‘saving up’ for a large purchase such as a piece of furniture, an expensive article of clothing, or a vacation is not possible, as there are too many demands on spare cash people might have at hand. Rather, they borrow money in the form of personal loan or credit card payment, and ‘save down’ by paying off the debt.

❝ Consumers who find themselves with spare cash are often prioritising debt repayment over traditional savings

As a result, consumers who find themselves with spare cash are often prioritising debt repayment over traditional savings, which makes sense – paying off expensive debt almost always delivers a better return than earning interest on a savings account. And lower income South Africans have significant penetration in both credit card debt and personal loan debt. For the Eighty20 National Segmentation cohort Mass Market, 78% have retail debt, while for the Middle Class, 62% have retail debt and more than half have personal and credit card debt. The latest Eighty20 Credit Stress Report found that 40% of credit-active South Africans are three or more months in arrears on at least one of these loans.

The result is a market that looks, on paper, unusually generous to savers even as fewer households can benefit. “The irony is that this may be one of the best times in recent memory to be a saver, yet for many households there has never been less left over to save” says Andrew Fulton, Director at Eighty20.

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