Tax-free savings accounts (TFSAs) offer fantastic tax-exempt investment opportunities for South Africans.
These accounts were created to help people save more money and reduce their borrowing.
Each year, South Africans visit financial institutions to start TSFAs.
A young man holding bundles of cash. Photo: pexels.com, @Ron LachSource: UGC
Many people have benefitted from them.
What are TSFAs?
Which is the best tax-free investment?
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At face value, TFSAs benefit all types of investors.
Individuals whose total income is below the prevailing tax threshold are unlikely to enjoy many benefits from these accounts.
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Ninety One TFSA
TheNinety One TFSAallows investors to grow their income and investments.
It spares people from capital gains tax or taxes applied on dividends and interests.
Owners are able to accumulate savings in a convenient manner.
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Adults can also invest on behalf of their children who are still minors.
you could invest from as little as R500 per month or make lump-sum payments.
You may also invest on behalf of your minor child.
A woman counting money. Photo: pexels.com, @Mart ProductionsSource: UGC
In such cases, all withdrawals must be paid into an account holding the minor’s name.
Usually, the longer you invest in a Ninety One TFSA, the higher your tax savings will be.
you could invest as long as you wish.
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Satrix TFSA
Satrix TFSA is one of the best tax-free savings accounts in South Africa in 2022.
Like other similar accounts, it has a limit of R36,000 per tax year and an R500,000 life limit.
Individuals can invest a lump sum or a series of regular investments in a tax year.
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You also get to choose your investment point among the 10 given Exchange Traded Funds.
If you wish, it’s possible for you to reinvest your interest and dividends.
Investec TFSA
Investec has tax-free fixed deposit accounts for South African citizens.
A man holding notes of cash. Photo: pexels.com, @WoodysMediaSource: UGC
Owners ofthis accounthave to invest in this 12-month fixed deposit account to maximise their savings potential.
Usually, the fixed rate is set at the date of investment.
The interest an individual earns is calculated daily and remitted monthly on the capital balance in the account.
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While early withdrawals are permitted, they may attract penalties.
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7.
African Bank TFSA
Did you know that theAfrican Bank TFSAhas a relatively high annual interest payout?
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The percentage may vary depending on numerous factors.
The bank allows you to invest as little as R50 up to the limits given by the national treasury.
Payouts are done every 12 months, meaning this is not a get-rich-fast scheme.
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Like other investments, you must be patient and make wise decisions.
you’ve got the option to grow your investment as long as you like.
Capitec TFSA
Capitec TFSA abides by the rules and regulations given by the South Africa Revenue Service.
A man using an ATM machine to access funds. Photo: pexels.com, @Ono KosukiSource: UGC
Additionally, you have a choice between a 12 and 24-month investment term.
you’re free to use this account as an accessible emergency fund.
To open this account, you must have R1,000, then add your savings whenever you wish.
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There are no monthly management fees.
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4.
Old Mutual allows you to invest online, directly, and through the company’s secure site.
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it’s possible for you to also stop and resume your monthly payments without penalties.
you might also withdraw your money whenever you wish.
To avoid this, you should monitor all your approved accounts to avoid exceeding the limit.
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Nedbank TFSA
Nedbank TFSA makes it possible to saveyour moneyand earn interest without being charged a cent.
You should deposit a minimum of R500 to enjoy the benefits.The bank offerscompetitive tiered interest rates.
The interest rates offered are subject to confirmation when the funds are received by the bank.
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1.
FNB TFSA
WithFNB TFSA, you are assured that your original deposit and quoted returns will not get lost.
you’re free to also manage your investment online or using the FNB app.
NB:Existing FNB clients can apply online but non-FNB clients must open an account with the bank first.
Which bank offers the best tax-free savings account?
The best TFSA is one that meets your needs and preferences.
Ensure you read the terms and conditions of various banks to determine the best one for you.
Yes, you should use a TFSA because it will help you save money.
Always monitor your accounts to ensure you do not violate the rules issued by the national treasury.
Which tax-free savings account is best?
What is the best tax-free savings account?
The best is one whose terms and conditions you might meet as an investor.
Different financial institutions have varied terms and conditions besides those issued by the national treasury.
Which bank pays the highest interest on TFSA?
FNB has the highest annualnominal interest ratein 2022.
Its rate is between 3.25 and 3.90%.
Bedbank comes in second with a rate of between 1.75 and 4.5%.
Is a TFSA better than a savings account?
Yes, it is better because TFSAs are exempted from tax on income, dividends, and interests.
In an ordinary savings account, these taxes are applied.
DISCLAIMER: This article is intended for general informational purposes only and does not address individual circumstances.
Any action you take upon the information presented in this article is strictly at your own risk and responsibility!
The South African Revenue Service (SARS) is responsible for collecting taxes.
SARS uses your tax number to track your Income Duty payment progress and other related information.
you better visit the nearest SARS branch to register for your Personal Income Duty number.
She has a Bachelor of Commerce & IT from the University of Nairobi and joined Briefly.co.za in November 2019.
The writer completed a Google News Initiate Course.
you might email her at perisrodah254@gmail.com.
She holds a Diploma in Mass Communication and a Bachelors degree in Nutrition and Dietetics from Kenyatta University.
Cyprine joined Briefly.co.za in mid-2021, covering multiple topics, including finance, entertainment, sports, and lifestyle.
In 2023, she finished the AFP course on Digital Investigation Techniques.
She received the Writer of the Year awards in 2023 and 2024.
In 2024, she completed the Google News Initiative course.
Email: cyprineapindi@gmail.com
