Prime-linked deposits - which pay comparatively better interest rates than traditional fixed deposits - have not escaped the recent volatility in interest rates.
When you opt for a prime-linked deposit, the interest rate you enjoy on your money fluctuates in line with the prime rate, which has hit a record high of 25,5 percent.
The interest rates that you get on prime-linked deposits are linked to the prime rate and move up and down with it.
Banks use different formulae to calculate these rates.
Nedcor Investment Bank has cut its prime linked deposit rates, effective from next week.
For the last four or so years, investors have been receiving prime less 4,5 percent and those who have had their money there even longer have been enjoying even better rates of around prime less three percent.
This has now been adjusted to prime less 4,75 percent for a six-month investment and prime less 4,5 percent for a 12-month deposit.
As from October 5, all Nedcor Investment Bank investors will receive an interest rate of 20,75 percent and 21 percent on their six- and 12-month deposits respectively.
"Recent interest rate movements have resulted in a necessary adjustment to the way in which your interest is linked to the prime rate," says Eugene Quass, head of Nedcor Investment Bank Direct.
Stephen Rogers, general manager of NIB Treasury, said the bank could "no longer afford to offer interest rates at prime less two, three and four percent.
"We have had to reduce our lending rates and made a decision to make a blanket adjustment to all our prime- linked interest rates".
Investors have been given 32 days notice and can choose whether to accept the lower interest rate or terminate the investment.
None of the other banks have recently changed the formula on which their prime-linked deposit rates are calculated.