Tax-Free Savings Accounts
South Africa’s best tax-free savings accounts listed Picture: File.

Home » Tax-Free Savings Accounts: The best ones in South Africa

Tax-Free Savings Accounts: The best ones in South Africa

In our series of articles supporting good financial habits, we investigate South Africa’s best tax-free savings accounts.

Tax-Free Savings Accounts
South Africa’s best tax-free savings accounts listed Picture: File.

In our ongoing series of articles that nurture good financial habits, we investigate South Africa’s best tax-free savings accounts (TFSA). What is a tax-free savings account, which institutions offer the best ones and how can you benefit?

TRENDING: ADJUSTED fines for AARTO infringements

As we know, the cost-of-living crisis is hitting many South Africans hard. And one of the best ways to save money and nurture wealth is through one of South Africa’s best tax-free savings accounts. Let’s get into the details …

SOUTH AFRICA’S BEST TAX-FREE SAVINGS ACCOUNTS

South Africa’s best tax-free savings accounts
You can double your retirement savings with a tax-free bank account. Picture: File.

In short, it’s a non-retirement savings account designed for maximum tax relief. Whether it’s a fixed-term bank account, money market, unit-trust investment a JSE-listed exchange-traded investment fund, check if it’s tax free it’s a winner.

ALSO READ: What’s the CHEAPEST online license disc renewal service?

Basically, in South Africa’s best tax-free savings accounts, capital gains, interests, and dividends earned are 100% untaxed investments. However, there is a limit to the total annual and lifetime contribution that qualifies for tax exemption.

ALSO READ: UN-backed report urges increase to SASSA Child Support Grants

This figure stands at approximately R30 000 annually, while the lifetime contribution limit is R500 000. Any contributions beyond the annual and/or lifetime limit are subject to 40% tax. This is to deter abuse of the tax-free benefits. Thankfully, interest gained that exceeds R500 000 is still credited as tax free and there is no limit to the amount of tax-free accounts you can have. So, let’s list them …

TAX-FREE ACCOUNTS LISTED

Banking advice. Picture: File.

According to the experts at MoneyToday, these are the best tax-free accounts currently on the market (listed in alphabetical order):

BankTax Free AccountNominal Interest Rate (annually)More info
ABSATax-Free Savings Account0.5 – 4%Apply Online
African BankTax-Free Investment5.7 – 5.85%Apply HERE
Capitectax-free savings account2.25 – 5.3%Apply Online
FNBTax-Free Cash Deposit3.25 – 3.90%Apply HERE
InvestecTax Free Fixed Deposit Account4.78%Apply Online
NedbankTax Free Savings Account1.75 – 4.5%Apply HERE
Old MutualTax Free Savings AccountYou decideApply Online
Standard BankTax-Free Call account2.8 – 3.5%Apply HERE

IT’S NOT ONLY BANKS THAT ARE TAX FREE

Picture: FIle.

Beyond South Africa’s best tax-free savings accounts, insurers, unit-trust managers, exchange-trade managers and government-owned savings bond schemes also offer tax-free savings accounts. Note that tax-free savings accounts are not chargeless, they’re simply free from capital gains and other taxes.

REMINDER: Two weeks left to SUBMIT your tax return in 2023

This article is for informational purposes only and should not be construed as financial advice. Be sure to share your thoughts on South Africa’s best tax-free savings accounts with our audience in the comments section below. And don’t forget to follow us @TheSANews on Twitter and The South African on Facebook for the latest updates.