Reinvest your returns to grow your wealth faster
Why reinvesting is important to wealth management.
If you’ve started saving and investing, you’re already on the right track. Putting something aside every month, no matter how much or how little, is a major pillar of financial planning.
But the real secret to building long-term wealth isn’t just making an investment and waiting – it’s actively managing what happens when your investment matures. Don’t make the mistake of allowing your investments to roll over automatically without giving the bank instructions, because you’ll miss out on opportunities for better growth.
What happens when your investment matures?
Say you invest in a 12-month fixed deposit with Nedbank. At the end of the term, you receive your capital plus interest. If you don’t give us instructions, the money will move into a notice deposit account by default. While this keeps your money safe, it may not be the best option to suit you. Automatic rollovers can limit your growth potential.
Instead of letting your investment sit idle or roll over without a plan, take initiative.
If your investment is close to maturity, do not let it roll over automatically. Contact your adviser and reinvest strategically – it's even easier with our digital banking channels.
Why reinvesting is important
Reinvestment is one of the easiest ways to grow your wealth without adding more money. By reinvesting your capital and returns, you increase your investment amount, which means higher future returns. This approach helps you do the following:
- Harness compound interest
Your returns start earning returns, creating a snowball effect.
- Achieve faster growth
Bigger investment amounts lead to bigger gains.
- Beat inflation
Reinvesting helps your money grow faster than rising prices.
Consider this example: You invest R10 000 at 10% annual interest. If you withdraw the R1 000 return each year, your investment stays at R10 000. But if you reinvest that R1 000 annually, your investment could grow to more than R25 000 in 10 years without adding extra contributions.
Steps to reinvest your matured investment
- Review your investment maturity date: Know when your term ends so you can act before automatic rollover.
- Contact your adviser or banker early: Discuss reinvestment options that align with your goals.
- Choose the right product: Find the option that best suits your financial goals.
- Give clear instructions: Tell the bank exactly what to do with your capital and returns.
- Repeat the process: Make reinvestment a habit for long-term growth.
Common mistakes to avoid
- Doing nothing: Leaving your money in a default account can mean lower returns.
- Withdrawing for short-term spending: This slows your wealth-building progress.
- Ignoring better options: Markets and products change. Review your options regularly.
Reinvestment vs withdrawal
Withdrawing returns may feel rewarding now, but reinvesting builds financial security for the future. It’s a smarter strategy for milestones like buying a home, funding education, or retiring comfortably.
Ready to grow your wealth?
Don’t let your matured investments roll over automatically. Take control, reinvest your gains, and make your money work harder for you. Contact us to find out how we can help you explore reinvestment options, start building a stronger financial future, and #GetMoneyFit.
