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Grow your investment with a tax-free account

Many South Africans may not have the necessary financial literacy to understand the different types of investment products on the market. Tax-free savings accounts offer great returns as a long-term investment and a certain level of flexibility that other types of investment may not have.

What is a tax-free savings account?

A tax-free savings account can be an on demand (call account) account, a unit trust investment, a JSE-listed exchange-traded fund and more. There is an annual limit on contributions of R36 000 or a R500 000 lifetime limit.

The benefits that come with a tax-free savings account include:

  • Proceeds earned from it, including interest income, capital gains and dividends, are exempt from tax. As such, you will receive your full investment return without being taxed on the growth you earn.
  • There are no penalties when you decide to make a withdrawal.

We have 2 types of tax-free accounts: the Tax-Free investment account and the Tax-Free Call investment account.

With the Tax-Free investment account, you can start investing in the stock market through exchange-traded funds (ETF) for as little as R250. This account gives you access to over 250 JSE shares and ETFs on an ad-hoc or recurring basis, and you can buy or sell orders into the market at any time during a JSE trading day. You have the flexibility to decide whether you would like to have your profits paid to your bank account or top up your next purchase.

The Tax-Free Call investment account requires an opening deposit of R250, and you can invest up to R36 000 per year with monthly or occasional deposits. This account also gives you the freedom and flexibility to access your money whenever you need to, without giving notice. Interest is calculated daily, and you could earn up to 3.5% interest on your investment.

Both accounts have their benefits; however, it is always beneficial for you to speak to a professional financial planner before deciding which account best suits your needs.

Terms and conditions apply.