Debit cards that allow clients to manage their money in an everyday account while earning the high interest rate of a money market fund are now available, with Sanlam launching this industry first.

Susan van Staden from Sanlam Personal Finance: Strategic Business Development said on Wednesday: "Throughout the world, debit cards are becoming the most convenient alternative to cash and cheques. However, traditional debit cards offered by banking institutions offer very low, if any, interest to clients.

"We believe that people want the liquidity of a money market account, the attractive interest rate offered by a money market account and the functionality of a bank account, and this is exactly what we’ve decided to give them."

Sanlam Liquid

The account, to be called Sanlam Liquid, therefore links with the Sanlam money market fund.

When clients open a Sanlam Liquid account, their deposits (including their salary, if they choose) are invested in the Sanlam money market fund to give them better returns than an ordinary bank deposit account.

Money market funds are protected by strict collective investment regulations, and fees are completely transparent on these accounts.

Van Staden said the Sanlam Liquid card offers clients a day-to-day account with total liquidity and access to their money via a Visa Electron debit card, as well as a full-fledged internet transactional capability for transfers and online payments, as well viewing account balances and statements.

Funds drawn abroad

The card can be used at any point of sale or ATMs where the Visa Electron sign or Saswitch signs are displayed. Funds can also be drawn at any ATM abroad and may be used at international POS terminals displaying the Visa Electron logo.

Since only banks may issue payment instruments and partake in settlements through the National Payment system in terms of current legislation, Rennies Bank acts as issuer of the debit card. This however does not affect the fact that the deposit is actually in the Sanlam money market fund

Sales fever has hit the high street over the last week but as well as bargains on clothes and electronics, the new year can also be a good time to grab decent deals on your finances.

A number of banks and building societies have launched new rates on savings accounts, credit cards and mortgages. But these rarely come free of pitfalls, so it is worth paying attention to the small print.

Barclays tops the polls for one of the best interest rates on a savings account with its new regular saver paying out 12.5 per cent gross. The rate has been increased by 25 per cent from the start of this month until the end of February. It is fixed for 12 months and applies exclusively to regular deposits of between £25 and £250 per month.

If you pay in the maximum monthly contribution of £250, you would receive £203.94 gross at the end of the year term, or £163.15 if you are a basic rate taxpayer and £122.36 for higher rate taxpayers. If you paid in £150 monthly, you would receive around £122 in gross interest.

To qualify for this account, you must already have a Barclays current account that you pay at least £1,000 into each month. Another downside is that you cannot make any withdrawals during the year. If you withdraw money or miss a payment you will lose the 12.5 per cent rate for the entire year, and instead receive the less attractive Barclays Easy Saver account rate of just 3.46 per cent.

The options include index and actively managed funds, but the actively managed funds are not individual funds. They are portfolios of funds that contain so many funds — up to 19 in some cases — that they could end up performing a lot like index funds. Or worse when you take into account their higher fees.

For better or worse, many of Fidelity’s best-known funds — Magellan, Contrafund, Low-Priced Stock, Diversified International — are not in the plan. It does contain some fine actively managed funds, but you won’t be able to buy them individually.

The index funds will cost investors 0.5 percent a year, or $50 on a $10,000 investment. That’s lower than the old TIAA-CREF funds and lower than most index funds offered by rival 529 plans.

The actively managed funds (excluding the money market fund) will cost 0.87 to 1.09 percent a year. That’s higher than the old TIAA-CREF funds.

A fund’s performance is calculated after these fees have been deducted. But the fees are worth knowing because over a long period they can affect performance.

The new Fidelity options fall into three categories:

– Two age-based options: These portfolios start off aggressive (invested mostly in stocks) and gradually become more conservative (moving more into bonds and money market funds) as the child gets closer to college age.

One age-based option invests in a group of index funds, the other invests in a collection of actively managed funds.

– Six static options. Fidelity offers three portfolios that do not change over time. One remains 100 percent in stocks, one remains 70 percent in stocks and 30 percent bonds and the third remains 100 percent in bonds and other fixed-income investments.

Each static option comes in an indexed-version and an actively managed variety, for a total of six static options.

– Individual funds. Fidelity offers six individual funds: the Spartan 500 index fund, a total market index fund, an international-stock index fund, an intermediate-term Treasury bond fund and a stock fund with social criteria.