Many of us dream of earning passive income. Having money that flows in every month. Money that can keep growing or cover a bit of spending.
One way to turn those dreams into reality is with investments that pay out monthly.
In this post, we’ll cover 12 of the best options to get your money working for you.
12 investments that pay monthly income in South Africa
South Africans have several investment options that pay out monthly. Depending on the investment type, it could pay monthly interest, dividends, or cash.
These investments can help save for retirement, supplement income, or simply build wealth. The options include savings accounts, bonds, property investments and more.
Here’s the list.
12 investments that pay monthly income:
- High-yield savings accounts: Bank accounts that generate interest on the money in the account and offer instant access.
- Bank notice deposit accounts: Higher-interest bank accounts that earn interest on money fixed with a notice period for withdrawals.
- Fixed deposits with monthly interest: Bank accounts that offer even higher fixed interest on money that is fixed over a longer period of time. Typically, 12 to 60 months.
- Money market accounts: Bank accounts that invest money in low-risk options to yield monthly interest payouts while offering easy access to the funds.
- Government retail bonds: Bonds offered by the government to help fund public projects in exchange for guaranteed interest on a principal investment amount over a fixed term.
- EasyProperties property shares: Fractional investments in rental properties with potential monthly payouts from tenant income.
- Real estate investment trusts (REITs): Investments in income-generating property portfolios.
- Rental property income: Monthly rental income from residential or commercial properties.
- Dividend-paying ETFs: ETFs that track indices of dividend-paying companies.
- Dividend-paying shares: Shares of companies that regularly distribute profits to shareholders.
- Unit trust income funds: Diversified funds focusing on bonds and other income-yielding assets.
- Endowment policies with income benefits: Life insurance policies offering regular income streams.
Struggling to keep up with your debt? Our team can help make your debt affordable once again. We help thousands of South Africans to reduce their monthly debt repayments, protect them from legal action, and keep their assets — our team can help you too.
1. High-yield savings accounts
High-yield savings accounts offer consistent monthly interest payouts on the money in the account. Most South African banks provide these accounts, making them accessible and reliable for steady monthly returns.
Where to invest? Most banks.
2. Bank notice deposit accounts
Notice deposit accounts offer higher interest rates than standard savings accounts while still providing monthly interest payouts without risk. These accounts require a notice period, typically ranging from 7 to 90 days before funds can be withdrawn.
Where to invest? Most banks.
3. Fixed deposits with monthly interest
Banks in South Africa also offer fixed deposit accounts that pay interest monthly. In this case, the money in the account is fixed for a longer period. Usually between 12 – 60 months to earn the highest interest rates that banks tend to offer.
Where to invest? Most banks.
4. Money market accounts
A money market account is a type of interest-earning account offered by banks or financial institutions that invests the funds in low-risk, short-term instruments like treasury bills, commercial paper, and certificates of deposit. Interest rates are variable and fluctuate based on the performance of the underlying investments. This means these accounts could perform better or worse than other interest-bearing savings accounts.
Where to invest? Banks like FNB and Standard Bank offer Money market accounts.
5. Government retail bonds
A bond is a fixed-income financial instrument that represents a loan made by an investor to a borrower, typically a government or a corporation. South African Retail Savings Bonds provide high fixed interest rates and allow for monthly interest payments. Backed by the government, they are a low-risk investment suitable for those seeking a stable income.
Where to invest? Check out RSA Retail Savings Bonds to learn more.)
6. EasyProperties property shares
EasyProperties allows investors to buy fractional shares in rental properties and earn a percentage of the income from tenant rents. With low entry costs and no property management required, it’s a simple way to generate monthly income.
Where to invest? Check out EasyProperties by EasyEquities to learn more.
Struggling to keep up with your debt? Our team can help make your debt affordable once again. We help thousands of South Africans to reduce their monthly debt repayments, protect them from legal action, and keep their assets — our team can help you too.
7. Real estate investment trusts (REITs)
REITs allow investment in income-generating property portfolios without owning physical properties. They typically pay monthly or quarterly dividends from rental income.
Where to invest? South Africans can buy or sell REITs through Johannesburg Stock Exchange brokers.
8. Rental property income
Rental property income refers to the money earned by owning and renting out residential or commercial properties. This income is generated from the rent tenants pay for using the property.
Where to invest? Find a real estate agent who can help you find a property or use a platform like Property24.
9. Dividend-paying ETFs
Dividend-paying ETFs (Exchange-Traded Funds) are investment funds that track the performance of a basket of dividend-paying stocks and trade on stock exchanges like individual shares. These ETFs focus on companies with a history of paying regular dividends, allowing investors to earn passive income while benefiting from stock market growth.
Note that dividend-paying ETFs don’t always pay out monthly. It may be quarterly or bi-annually, depending on the ETF.
Where to invest? Find ETFs like the Satrix Divi ETF on the JSE or investment platforms like EasyEquities.
10. Dividend-paying shares
Dividend-paying shares are stocks of companies that distribute a portion of their profits to shareholders in the form of dividends. These shares provide investors with regular income in addition to any capital gains from an increase in the share price.
Where to invest? Buy stocks through investment platforms.
11. Unit trust income funds
Unit trust income funds are collective investment schemes that pool money from multiple investors to invest in a diversified portfolio of income-generating assets, such as bonds, money market instruments, and dividend-paying shares.
Where to invest? Firms like Allan Grey, Ninety One, Sygnia, Old Mutual and others.
12. Endowment policies with income benefits
Endowment policies combine long-term savings with regular income payouts. In South Africa, premiums are typically invested in a balanced portfolio, with monthly income provided after a lock-in period of five years or more.
Where to invest? With insurers like Sanlam, Old Mutual, Discovery, or others.
⭐ Related content:
- Monthly investment plans
- Best tax-free investment accounts in South Africa
- How to invest money in South Africa
Final thoughts
As you can see, South Africa offers several investment options that pay out monthly. Options include REITs, dividend-paying shares, property, and bank accounts.
The next step is to do a bit of research. Do it yourself or talk to a financial advisor.
If you want to take care of your debt before you start investing. Talk to someone on our team at My Debt Hero. We specialise in helping South Africans with their debt.
