Here are the 10 best tax-free savings accounts in South Africa 2022
Tax-free savings accounts (TFSAs) offer fantastic tax-exempt investment opportunities for South Africans. These accounts were created to help people save more money and reduce their borrowing. If you wish to take advantage of this provision, you ought to find the best tax-free savings account that meets your needs and preferences.
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Source: UGC
The best tax-free savings account is one that offers you the most savings and has a reasonable nominal interest rate. Each year, South Africans visit financial institutions to start TSFAs. Many people have benefitted from them.
What are TSFAs?
Which is the best tax-free investment? TSFAs, are the best, and they are a brainchild of the national treasury to bolster savings among the middle and low-income earners in South Africa. The government realised that these groups of earners were exposed to financial vulnerabilities, for example, the inability to absorb the financial shock after a crisis.
TFSAs encourage savings and help individuals to form saving habits. At face value, TFSAs benefit all types of investors. However, the degree of benefits depends on the investment mix, debt level, income level, and age. Individuals whose total income is below the prevailing tax threshold are unlikely to enjoy many benefits from these accounts.
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Best tax-free savings accounts in South Africa
Many people want to find out the best tax-free savings account in South Africa in 2022 to invest their money. Different financial institutions in the country have these accounts, and below are some of the top options you should consider.
10. Ninety One TFSA
The Ninety One TFSA allows investors to grow their income and investments. It spares people from capital gains tax or taxes applied on dividends and interests. Owners are able to accumulate savings in a convenient manner.
You can invest as little as R500 monthly in your account or make lump-sum payments. Adults can also invest on behalf of their children who are still minors.
You can invest from as little as R500 per month or make lump-sum payments. You may also invest on behalf of your minor child. In such cases, all withdrawals must be paid into an account holding the minor's name.
Usually, the longer you invest in a Ninety One TFSA, the higher your tax savings will be. You can invest as long as you wish.
Requirements
- SA ID book
- Proof of residence
Contacts
- Telephone number: 0860 500 100
- Email address: comcentre@ninetyone.com
9. Satrix TFSA
Satrix TFSA is one of the best tax-free savings accounts in South Africa in 2022. Like other similar accounts, it has a limit of R36,000 per tax year and an R500,000 life limit. Individuals can invest a lump sum or a series of regular investments in a tax year.
Besides not taxing your income, capital gains, and dividers, Satrix allows you to choose how you want to invest. You also get to choose your investment point among the 10 given Exchange Traded Funds. If you wish, you can reinvest your interest and dividends.
Requirements
- SA ID book
- Proof of residence
Contacts
- Telephone number: + 27 (0) 10 020 2250
- Email address: helpme@satrixnow.co.za
Source: UGC
8. Investec TFSA
Investec has tax-free fixed deposit accounts for South African citizens. Owners of this account have to invest in this 12-month fixed deposit account to maximise their savings potential. Usually, the fixed rate is set at the date of investment.
The interest an individual earns is calculated daily and remitted monthly on the capital balance in the account. While early withdrawals are permitted, they may attract penalties. A minimum deposit of R30,000 and a maximum of R36,000 is adhered to, as advised by the national treasury.
Requirements
- South African ID book
- Proof of residence
Contacts
- Telephone number: 086000 0 TAX (829)
- Email address: taxfree@investec.co.za.
7. African Bank TFSA
Did you know that the African Bank TFSA has a relatively high annual interest payout? The percentage may vary depending on numerous factors. The bank allows you to invest as little as R50 up to the limits given by the national treasury.
Payouts are done every 12 months, meaning this is not a get-rich-fast scheme. Like other investments, you must be patient and make wise decisions. You can grow your investment as long as you like.
Requirements
- South African ID book.
- At least R500 for account opening
Contacts
- Telephone number: 0800 633 633
- Email address: africanbank@tip-offs.com
6. Capitec TFSA
Capitec TFSA abides by the rules and regulations given by the South Africa Revenue Service. If you own or desire to start this account, you should understand that you are permitted to open one TFSA at any of Capitec branches.
You are also at liberty to deposit any amount up to R36,000 per year, either as a single deposit or multiple deposits. Additionally, you have a choice between a 12 and 24-month investment term.
Requirements
- Proof of residence
- South African ID book
Contacts
- Telephone number: 0860 10 20 43
Source: UGC
5. ABSA TFSA
ABSA TFSA is an opportunity that helps South Africans to save money. The bank follows all the rules and regulations given by the national treasury. One unique aspect of this account is that owners can access their money whenever they wish online or at any ABSA branch.
You can use this account as an accessible emergency fund. To open this account, you must have R1,000, then add your savings whenever you wish. There are no monthly management fees.
Requirements
- Proof of residence
- South African ID book
- R1,000 for starting an account
Contacts
- Telephone number: 0860 111 515
- Email address: saving@absa.co.za
4. Old Mutual TFSA
With Old Mutual TFSA, you can enjoy the benefits of a standard unit trust investment portfolio. Investors enjoy 100% tax-free investing, meaning they do not pay income tax, dividend tax, and capital gains tax on the allowed tax-free amount.
Old Mutual allows you to invest online, directly, and through the company's secure site. You can invest via debit order or by offering a lump sum, and you can switch between unit trusts within your TFI account. You can also stop and resume your monthly payments without penalties.
Requirements
- Proof of residence
- For those of legal age, a barcoded ID book or passport
- For minors, the ID of their parent or guardian and the applicant’s birth certificate
- Old Mutual bank account details. You can start an account with R250
Contacts
- Telephone number: 0860 60 60 67
3. Standard Bank TFSA
Standard Bank TFSA is an effective way of saving for your goals because any interest, dividends or capital gains will be free of tax. This account offers you flexibility because you do not have to commit to making future contributions. You can also withdraw your money whenever you wish.
If you exceed the annual TFSA limit, you will attract a penalty tax of 40% for contributions to your account that exceeds the limits. To avoid this, you should monitor all your approved accounts to avoid exceeding the limit.
Requirements
- Proof of residence
- Barcoded ID book or passport
Contacts
- Telephone number: 0860 109 075
- Email address: information@standardbank.co.za
2. Nedbank TFSA
Nedbank TFSA makes it possible to save your money and earn interest without being charged a cent. You should deposit a minimum of R500 to enjoy the benefits. The bank offers competitive tiered interest rates.
Interest can be paid out or capitalised on a monthly basis, and there are no monthly fees or commissions charged. The interest rates offered are subject to confirmation when the funds are received by the bank.
Requirements
- Proof of residence
- Barcoded South African ID book for people over 16 years old. Applicants under 16 years old must submit their parent’s or guardian’s ID or passport and the applicant’s birth certificate.
- A minimum deposit of R500 to open an account.
Contacts
- Phone number: 0800 555 111
1. FNB TFSA
With FNB TFSA, you are assured that your original deposit and quoted returns will not get lost. Your investment does not attract monthly fees, and you can save as little as R1,000. You can also manage your investment online or using the FNB app.
To start this account, you must hold an FNB transactional account or open one if you do not have it.
Requirements
- A utility or retail account not older than 3 months (It should clearly state your physical address)
- Income tax number
- South African ID book
- A minimum deposit of R1,000 for opening the account
NB: Existing FNB clients can apply online but non-FNB clients must open an account with the bank first.
Contacts
- Telephone number: 0877 362 247
Source: UGC
Which bank offers the best tax-free savings account?
The best TFSA is one that meets your needs and preferences. Some financial institutions ask for as little as R50 investment amount, while others may ask for a higher amount. Ensure you read the terms and conditions of various banks to determine the best one for you.
Should I put money in a tax-free savings account?
Yes, you should use a TFSA because it will help you save money. Always monitor your accounts to ensure you do not violate the rules issued by the national treasury.
Which tax-free savings account is best?
The best options include FNB TFSA, Nedbank TFSA, Standard Bank TFSA, Old Mutual TFSA, and ABSA TFSA.
What is the best tax-free savings account?
The best is one whose terms and conditions you can meet as an investor. Different financial institutions have varied terms and conditions besides those issued by the national treasury.
Which bank pays the highest interest on TFSA?
FNB has the highest annual nominal interest rate in 2022. Its rate is between 3.25 and 3.90%. Bedbank comes in second with a rate of between 1.75 and 4.5%.
Is a TFSA better than a savings account?
Yes, it is better because TFSAs are exempted from tax on income, dividends, and interests. In an ordinary savings account, these taxes are applied.
TFSAs are financial tools that you can use to invest your hard-earned money and get tax-exemption benefits. For you to enjoy the maximum benefit possible, you have to find the best tax-free savings account for your needs.
DISCLAIMER: This article is intended for general informational purposes only and does not address individual circumstances. It is not a substitute for professional advice or help and should not be relied on to make decisions of any kind. Any action you take upon the information presented in this article is strictly at your own risk and responsibility!
READ ALSO: How to get your tax number in 2022: Essential information
Briefly.co.za recently published an article on how to get your tax number in South Africa. The South African Revenue Service (SARS) is responsible for collecting taxes.
SARS uses your tax number to track your Income Duty payment progress and other related information. You need to visit the nearest SARS branch to register for your Personal Income Duty number.
Source: Briefly News
Peris Walubengo (Lifestyle writer) Peris Walubengo is a content creator with 5 years of experience writing articles, researching, editing, and proofreading. She has a Bachelor of Commerce & IT from the University of Nairobi and joined Briefly.co.za in November 2019. The writer completed a Google News Initiate Course. She covers bios, marketing & finance, tech, fashion & beauty, recipes, movies & gaming reviews, culture & travel. You can email her at perisrodah254@gmail.com.
Cyprine Apindi (Lifestyle writer) Cyprine Apindi is a content creator and educator with over six years of experience. She holds a Diploma in Mass Communication and a Bachelor’s degree in Nutrition and Dietetics from Kenyatta University. Cyprine joined Briefly.co.za in mid-2021, covering multiple topics, including finance, entertainment, sports, and lifestyle. In 2023, she finished the AFP course on Digital Investigation Techniques. She received the 2023 Writer of the Year Award. In 2024, she completed the Google News Initiative course. Email: cyprineapindi@gmail.com
