In Simple terms; every born South African citizen is allowed a Tax – Free investment account.
Once you had contributed your limit over a set period, you will no longer be able to save for your future without paying taxes.
Contributions are restricted to R2750 P/M or R33,000 per year.
Why Invest in a Tax Free Investment / Savings account?
Its officially a privilege handed to each S.A – I.D carrying citizen to be able to save over a set period, for a life-time amount up to R500,000 / half a million rand over 17 years. The math’s suggest that you could earn almost double your money back (after charges) and for many people, half a million is a nice mid-life retirement sort of perk.
Lets be honest, half a million can be blown in 1 day if you have some big ideas.
None-the-less it can be used for your kids education, to pay up debts, house upgrades, a new vehicle or a future vacation / world trip.
Costs of a Tax Free Investment account?
– Admin Fees (can be recovered* if terms are met)
– Financial Adviser fee (if applicable)
– Set monthly minimum debit / commitment required (R270+) – the higher the contribution, the more likely it will benefit your future.
What Banks currently offer a Tax Free investment / Savings account?
Several banks / Financial Services offer the account with similar terms and conditions. The end product (earnings and journey) may depend on how the account is managed over the years of investment. So it may be important to weigh up all options prior to choosing a Bank or financial outlet.
Old Mutual Tax Free Investment Account
Alan Gray Tax Free Investment Account
Nedbank Tax Free Investment Account
The youth of our country often live the life of a stereotypical millennial. Refuse to invest in assets, they make loans, they rent houses and cars. Millennials live for now, but the truth is you can find yourself at 60 years old with debt and no retirement plan in place. You may already know many people in this exact position.
Nevermind their own personal difficulty, if you going into retirement with these issues, your children may bare the burden when you could have simply set R800 p/m of your salary aside for 10 years. The S.A economy seems to never grow. We have inflation on foods, accommodation, travelling, water, petrol and each and every year the inflation will spread unevenly. Be-careful with predicting the financial future; what cost R42 last year can cost R65 this year.
That’ s a near 50% on inflation.
:Check the price of Pink Salmon at Pick n Pay….
A Tax Free Investment plan may be every South African’s last chance at a brighter future. I do realize having money to use now is better than having it later (sometimes). Think of a bank; they charge you to lend money now, so they can get it back later. The bank even charges you when you give them money.
Other Financial Management Advice:
try using a free reputable local money management service like 22 Seven.
You can manage several of your accounts (bank, Edgars, TFG, savings account, mortgage etc.)