This study examines the key determinants of domestic savings in South Africa - using the cointegration based error-correction model. The study was motivated by the current low and declining saving rate in South Africa. The empirical results of this study, which cover the period 1968-2004, indicate that savings in South Africa are largely determined by the growth rate of real GDP, foreign savings, real deposit rate, government expenditure and terms of trade. Specifically, the study finds gross domestic savings to be positively related to the growth rate of real GDP, according to the life-cycle hypothesis. The study also finds that higher government expenditure is associated with lower domestic savings in South Africa. An improvement in the terms of trade tends to increase the saving rate in South Africa, while foreign savings seem to supplement rather than substitute domestic savings. An increase in real deposit rate also tends to encourage households to increase their savings in South Africa, in accordance with the McKinnon-Shaw hypothesis. Although the coefficient of inflation rate in the savings function is positive as expected, it failed to reach the traditional level of significance hypothesised in this study.