The main features of each are set out below:

RSA Fixed Rate Retail Savings Bonds

The Fixed Rate Retail Savings Bond series consists of bonds with 2-year, 3-year and 5-year
terms.

Fixed Rate Retail Savings Bonds earn a market-related fixed interest rate, which is priced off the
current government bond yield curve, and is payable on the interest payment dates until maturity.
Different interest rates apply to each of the maturities in the series.

Investors in these bonds may choose not to receive their interest payments on the payment dates,
but rather to reinvest the payments. Such reinvested payments then form part of the capital
balance and attract interest at the same rate as the capital amount. Investors must indicate the
relevant option on their application form. Note: This option may only be exercised on the date
of application, or prior to the first interest payment date, and may not be exercised or
changed after such date again.

Investors in Fixed Rate Retail Savings Bonds who are 60 years and older can elect, on
application, to receive their interest payments on a monthly basis. Please note that the monthly
interest will only start to pay on the last day of the month following the investment date.
Accrued interest will be included in the first interest payment. However, under this option,
interest payments may only be paid into the designated bank account and may not be reinvested.
This option is known as the Pensioners Bond.

Inflation Linked Retail Savings Bonds

The Inflation Linked Retail Savings Bond series consists of bonds with either a 3-year, 5-year or
10-year maturity.

Capital amounts invested in Inflation Linked Retail Savings Bonds are inflation adjusted over the
term, and a floating interest rate is payable every 6 months on the interest payment dates.

The capital amount is inflation adjusted semi-annually on the interest payment dates until
maturity. A floating interest rate is applicable, derived from the government inflation linked
bond yield curve. The interest is payable until maturity.

Settlement Date

The investment period will commence on the settlement date, being the date that the money is
received in the RSA Retail Savings Bond account.

Purchasing Limits

The minimum amount that can be invested in any of the RSA Retail Savings Bonds is R1 000
(one thousand Rand) per investment. Investors can increase their investment in any of the Retail
Savings Bonds by buying further RSA Retail Savings Bonds, subject to their portfolio not
exceeding R5 000 000 (five million Rand) at any time, and each amount invested being a
minimum of R1 000.

Determination of Interest Rates

The interest rates for RSA Retail Savings Bonds are priced off the RSA Government Bond yield
curve. New interest rates are determined by interpolating the equivalent yields of the 2-year, 3-
year and 5-year government bonds for the Fixed Rate Retail Savings Bonds on the last business
day of each month, and the equivalent yields of 3-year, 5-year and 10-year government inflation
linked bonds for the Inflation Linked Retail Savings Bonds on the first date of issue and
thereafter on Interest Payment Dates.

Interest rates will be rounded upwards to the nearest ¼ of per cent. The National Treasury will
change the prevailing interest rate if the yield (rate) of the RSA Government Bonds moves
(negatively or positively) by more than 50 basis points (0.5%) from the last business day of one
month to the next.The interest rate determined on the last day of each month shall be the fixed
rate for new investments in the following month of the term of the investment, even if the
prevailing rate fluctuates from time to time.

As the prevailing interest rate may change from month to month, those wanting to invest in any
Fixed Rate Retail Savings Bonds should request from the National Treasury the prevailing rate in
relation to the bond they wish to purchase. The prevailing interest rate may change between the
date on which a person enquires and the settlement date, if the time lapse between these dates is
over the last day of a calendar month.

If there are any changes in the prevailing interest rate, the revised rate will be effective from the
first day of each month and will be published daily in domestic financial newspapers and on the
RSA Retail Savings Bonds website (www.rsaretailbonds.gov.za).

Note that as the South African Post Office and Pick ’n Pay stores only operate as points of sale
for RSA Retail Savings Bonds, any rates given by or on display at these locations should first be
verified with the National Treasury.

Interest Payments

Fixed Rate Retail Savings Bonds

Interest due on each of the Fixed Rate Retail Savings Bonds is paid into the designated bank
account semi-annually on the interest payment dates, being the 31st of March and the 30th of
September each year.

Investors in Fixed Rate Retail Savings Bonds may elect not to receive their interest payments on
the interest payment dates, but rather to reinvest the interest payments. Such reinvested interest
payments then form part of the capital balance and attract interest at the same interest rate as the
capital amount. An investor is required to indicate the relevant option on the application form.
Please note that this option may only be exercised on the date of application, or on any date
prior to the first interest payment date, and may not be changed thereafter.

In addition, investors in Fixed Rate Retail Savings Bonds who are 60 years and older are entitled,
on application, to elect to receive their interest payments on a monthly basis. Please note that
the monthly interest will only start to pay on the last day of the month following the
investments date. Accrued interest will be included. However, under this option, interest
payments may only be paid into the designated bank account and may not be reinvested. This
option is known as the Pensioners Bond.

Inflation Linked Retail Savings Bonds

Investors in Inflation Linked Retail Savings Bonds will have the benefit of their investment
being inflation adjusted, as well as receiving a market-related real rate of return (interest rate)
semi-annually on the capital balance. These bonds have maturities of 3, 5 or 10 years. There is
no option to reinvest any interest payments for these bonds.

Capital Adjustments

The capital amount invested in each of the three maturities available is adjusted for
inflation semi-annually on the interest payment dates, which are 31 May and 30
November. The inflation rate used is the consumer price index (CPI) published monthly
by Statistics South Africa (referred to as the ‘CPI – All items for metropolitan areas’).
The CPI is based on an index, with a new index calculated and published monthly; the
difference between the indices reflects the CPI growth between consecutive months.

When an investment is made, the index applicable on the settlement date is used for the
investments made and is referred to as the base rate. See the Terms and Conditions of
Issue of the Inflation Linked Retail Savings Bonds for how to calculate the base rate on
the settlement date.

On the Interest Payment Dates, Early Withdrawal Dates and/or Maturity Dates, the CPI
on that date is determined. The CPI on the relevant date is referred to as the Reference
CPI.

Calculating the Inflation Adjustment

To calculate the inflation adjustment on the total capital amount invested, the reference
CPI on the CPI calculation date is divided by the base rate and multiplied by the capital
amount invested. The reference CPI over the base rate is referred to as the index ratio.
For example, if you invest R10 000 on 1 April and the base rate is 101.2: If on the
interest payment date (which would be on 31 May), the index is 102.6, then to calculate
the inflation adjusted balance of your R10 000, the following formula is applied:

Calculating Interest Payments

 Payments are made to investors on the semi-annual payment dates, which are 31 May and
30 November of each fiscal year.

The rate payable on these dates is a floating rate for each of the three maturities on offer
over the term, with the rate applicable for each maturity derived from the government
inflation linked bond yield curve as reflected on the Johannesburg Stock Exchange Rates
are determined on the payment date and prevail until the next payment date.

Interest payments are calculated according to the following formula:

’C’is the coupon rate.

‘e’ is the inflation adjusted balance as at that date (capital balance).
The capital balance is determined on the interest payment dates by applying the index
ratio to the capital amount.

Redeeming Bonds

Investors will be notified by the National Treasury of any RSA Retail Savings Bonds that are due
for maturity at least six weeks prior to the maturity date. The notification will only be forwarded
to the investors’ correspondence address as stipulated in the application form, or to the latest
change of correspondence address received by the National Treasury at the date of sending the
said notification.

Investors in Inflation Linked Retail Savings bonds have the option to reinvest the amount due to
them on maturity in any of the Fixed Rate Retail Savings Bonds, and vice versa.

Investors in Fixed Rate Retail Savings Bonds also have the option of reinvesting the amount due
to them on maturity in any of the 2-year, 3-year or 5-year Fixed Rate Retail Savings Bonds at the
prevailing interest rate, subject to the RSA Retail Savings Bonds still being in issue. Should
investors wish to do so, they must return a completed “Option to Reinvest Form” to the
National Treasury within 15 days of the maturity date. The prevailing interest rate on the first
business day following the maturity date will apply to the reinvestment, and such date shall be
the settlement date in respect of the reinvestment. The reinvestment will be subject to the terms
and conditions of issue.

For Fixed Rate Retail Savings Bonds, should investors elect not to have the amount due to them
reinvested for a further period, or should the National Treasury not receive the “Option to
Reinvest Form” within the period stipulated above, the capital balance together with any interest
payable at the maturity date will be paid to the investor via a direct deposit into the designated
bank account. The capital balance will only be paid to the registered holder; investors may not
give instructions to have the capital balance deposited into a third party’s bank account.

On maturity, should investors require that the amount due to them be paid into an account other
than their designated bank account, they must complete the applicable section on the
“Redemption Option Response Form”. Investors must include certified copies of their latest
bank statements for security purposes. Note that these banking details will only apply to the
relevant redemption payment, and will not apply to any other investments an investor may have.
Failure to notify the National Treasury of any amended details or particulars shall result in the
amount due to an investor being deposited into the designated bank account reflected in the
application form, or the investors’ last instruction received by the National Treasury regarding a
change in the designated bank account.

Withdrawal

An investor may make a withdrawal of his/her capital balance after 12 months from the
settlement date, by submitting an application to the National Treasury on the prescribed
application form. Copies of the prescribed application form can be obtained from the National
Treasury or can be downloaded from the RSA Retail Savings Bonds website at
www.rsaretailbonds.gov.za. Should you wish to withdraw a portion of the capital amount
invested, the capital balance MUST NOT be less than R1 000.00 (one thousand Rand) after the
withdrawal. Investors will have to decide whether to withdraw the entire capital balance or not to
effect the early withdrawal.

Interest on the withdrawal amount since the previous interest payment date will be calculated and
paid on the withdrawal date. However, a penalty is imposed on the withdrawal amount. The
penalty is equal to approximately one interest payment on the early withdrawal amount and will
be deducted from the withdrawal amount before being repaid to an investor. Where an investor
has elected to reinvest their interest, the penalty on partial withdrawals will be deducted from the
capitalised interest.

Payment of the withdrawal amount, less the penalty, shall be made into the designated bank
account within 20 business days of the date of receipt of the application. No cheques will be
issued by the National Treasury for any reason whatsoever, and investors may not instruct the
National Treasury to credit any third party account.

Investors may be allowed to withdraw a portion of (provided that the capital balance does not fall
below R1 000.00), or the entire investment, within the first 12 months of the settlement date,
only on the grounds of extraordinary changes in personal circumstances. In such an event,
investors must submit a formal application to the National Treasury, setting out the particulars of
such extraordinary changes in circumstances that compel the investor to effect such withdrawal.
The National Treasury reserves the right, within its sole and absolute discretion, to grant or
refuse the request. Should the request be granted, the penalty for withdrawal prior to the
expiry of 12 months from the settlement date shall be a total forfeiture of all interest
received on such withdrawal, which amount shall be set-off against that portion of the
amount being withdrawn.

Death of a registered holder

In the event of the death of a registered holder prior to the maturity date, the maturity date shall
fall on the date on which the National Treasury receives all required documentation, as set out
below:

 In the event a beneficiary having been nominated: a payment in full shall be made to the
nominated beneficiary or beneficiaries, after receipt of certified copies of the
beneficiary’s or beneficiaries’ identity document(s) and personal bank statement(s)
 In the event of a beneficiary not having been nominated: the investment shall be
redeemed in full at the request of the Executor and paid into an account determined by
the Executor. However, a letter of Executorship issued by the Master of the High Court
of the Republic is required before the National Treasury can register and pay RSA Retail
Savings Bonds in the name of the deceased estate.