Insurance and investment company Liberty has launched a new app called Stash aimed at getting South Africans to invest and take advantage of Treasury’s generosity when it comes to tax-free investments. The app allows users to link any credit, debit or cheque card from any of South Africa’s major banks (with the exception of Capitec) to it. When users transact with the linked card the transaction is rounded up to a predefined amount and the difference is added to Stash.

Stash only offers a tax-free version for now, and users funds are invested in a Liberty fund that tracks the top 40 companies on the JSE. So, if you’re planning to use Stash and you have an existing tax-free account you need to make sure your combined contributions don’t exceed the R33,000/annum limit or you’ll have to pay penalties on the excess. We’re hoping a non tax-free version follows for those of us already adulting hard and maxing out our tax-free investments at the beginning of each financial year.

Spend to save

Though only available for Android for now, an iOS version of Stash will follow. Liberty says its targeting users between the age of 18 and 28, who don’t tend to save or invest, in part because of the complexity and laboriousness of doing so. To this end, Liberty has made signing up as easy as downloading the app, putting in your first name and your phone phone number.

All FICA requirements are completed in app, with users able to submit proof of address in the form of a picture snapped with their smartphone of a bill or similar. In the case of those users who don’t have proof of address, the app allows them to send an email to their landlord or similar, the response to which can satisfy FICA requirements. Also, it’s only necessary to complete FICA requirements when you invest more than R2,000 a month or when you want to cash out.

Users can choose to round up to between R10 and R50 for each transaction (in increments of 10), and the service works by picking up the SMS or other spending notifications (like FNB’s InContact messages in its app). To encourage users to sign up, Liberty offers a R50 incentive to users for signing up, and a further R10 for each person they refer who completes the sign-up process.

In addition to the rounding-up mechanism, Stash users can hit a button on the apps landing page once every 24 hours that will stick another R10 into the investment account, and can set up features like “Sunny Money” that uses location data and a weather service to assess the weather, and invest a predefined amount on sunny days (presumable for rainy ones, yes?) or an amount that matches the maximum temperature for the day. At the end of each month users can also opt to top up their Stash account if they find they have extra dosh kicking about.

Cash me out(side)

Cashing out is done through the app, and there are no fees for using Stash, topping it up, or emptying it out. Liberty’s stated goal isn’t to make money on the service, but to develop relationships with potential future customers of its other products. It’s also not spending much on marketing the service, opting instead to rely on word of mouth (and stories like these) to grow the user base.

The service soft-launched in December, and has seen 1,500 signups since (and only around 30 cash out of those people choosing to take the R50 sign-up bonus and run). Liberty says it opted for Android first because it’s the most prevalent smartphone operating system in South Africa.

Stash isn’t the first invest-your-change service in South Africa (FNB has had a similar offering, albeit one that puts the cash in a savings account, for years), but it’s the first that isn’t bank specific and that ties in to tax-free accounts. It’s also the first in what will no doubt be a number of moves by Liberty to offer innovative products to youngsters and try to grow its client base.

Now, if only Liberty would hurry up with the non-tax-free version…