The Tax-Free Savings account (TFSA) was introduced into the investment industry in 2017 by the FSB to incentivize individuals to start savings. The investment is 100% TAX FREE, which means it is free from Capital Gains Tax, Dividends withholding tax and Interest.
There are limits as to how much an individual can invest, which started at R30 000 per annum but has been increased to R33 000 per annum and you are currently only allowed to invest up to a maximum contribution of R500 000 throughout your lifetime. This investment is available to all individuals including children, so a whole family can invest up to R33 000 each per annum and they can invest it into any risk profiled fund of their choice. You can also do a debit order into this investment with the maximum of R2750 per month which equals the R33 000 per annum.
We have 5 risk profiled funds to invest these savings into, from Low Risk to high risk as well as a Global Flexible fund. The Tax-Free Savings Account is 100% Liquid and can be redeemed at any stage, which makes it an amazing savings vehicle for children’s education or just to save for a rainy day.
The TFSA falls in the financial year end and contributions can be added up to the 28/02/2019 for the R33 000 limit.