The national treasury introduced a tax-free savings account back in 2014, with an objective to get South Africans to save.
This is especially important now with all the uncertainty that exists, not to mention the state of the South African economy.
Though these tax-free savings and investment accounts are designed for long term saving, there’s a few terms and conditions you need to know to understand how they work.
My Money and Me with Sumitra Nydoo spoke to Simon Brown, Founder Of Justoneleap.Co, who unpacks how you can take full advantage of these products.
Listen to the full conversation here:
What’s a Tax Free Savings Account
A tax-free investment (TFI) is an investment of which the capital amount is guaranteed, and the investment returns exempted from income tax, dividends tax, and capital gains tax.
Introduced on 1 March 2015, TFIs is a South African government incentive to encourage South Africans to increase their savings or to start to save.
According to the South African Revenue Service (SARS), the following investment accounts qualify as tax-free investments (TFIs).
- Fixed deposits.
- Retail savings bonds (available from the national treasury).
- Unit trusts (collective investment schemes).
- Linked investment products.
- Certain endowment policies issued by long-term insurers.
- Exchange-traded funds (ETFs) are classified as collective investment schemes.
- Fixed deposits include money market or fixed-term bank accounts. Retail savings bonds are available from the national treasury.
If you wish to get more information about how you can start an tax-free investment account click here