The ETF that guarantees a higher return than a Ponzi scheme

By John Eccles

I am one of the few residences in South Africa that has an Eskom prepaid meter which puts the responsibility and control on when and how much electricity I purchase directly on me. The majority of paying electricity users in South Africa do not have such a privilege as they get billed by their municipal authority after it has marked up the Eskom rate by a healthy margin for no obvious reason other than enforcing another lucrative tax to local government.

Like many South Africans I have over a number of years made changes that reduces my dependence on Eskom by installing hot water solar panels, gas cooking hobs, energy efficient lighting and boiling only the amount of water in my kettle that is required amongst other. We also have a mostly low maintenance fynbos garden.

More importantly though, I have over the last number of years been buying as much prepaid electricity from my local vending machine or recently through the sms service provided by Capitec Bank. I make sure that the amount I purchase stays in the cheapest bands and in summer months build up a very healthy store of electricity on my meter which is my Eskom Tax Free (ETF) savings bank. It is currently paying a healthy 12.69% P/A interest but according to the latest application to NERSA, is probably going to be increased in the near future by anything up to 25.3% P/A.

It can therefore be seen that the recently introduced Tax free saving accounts by financial institutions, limited to a pathetic R30,000.00 P/A or for that matter any other ETF cannot pay anything near the return of my ETF!

*John is a Biznews community member