Unlocking Savings: Many South Africans Aren’t Maximising Their Tax-Free Savings Accounts
- Nearly half of South Africans with tax-free savings accounts (TFSAs) aren’t using their full R36,000 annual allowance, leaving thousands of rands in potential tax-free growth on the table
- The average contribution is just R14,171, meaning millions in lost savings nationwide
- South Africans are encouraged to boost their knowledge of TFSAs, top up their accounts, and keep every rand they earn tax-free
Source: Getty Images
South Africans are leaving serious money on the table by underusing their tax-free savings accounts (TFSAs). Many lack knowledge on how to make the most of their allowance.
Even though the tax year ended on 28 February 2026, South Africans are encouraged to boost their knowledge of TFSAs so they can use them to their advantage in the upcoming tax year.
Data from leading online tax platform TaxTim shows that while almost half of its users have opened a TFSA, the average contribution is just R14,171, well below the R36,000 annual limit. That’s R21,829 in potential tax-free growth that’s going unclaimed. Across the country, this adds up to millions of rands in lost savings.
“Many South Africans have TFSAs but aren’t putting in enough to get the full tax benefit,” says Daniel Swiegers, Director at TaxTim.
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SARS has proposed raising the annual limit from R36,000 to R46,000 to encourage South Africans to save more.
Why tax-free growth matters?
Unlike regular savings accounts, TFSAs allow all growth, interest, dividends, and capital gains to stay tax-free. Every rand you earn stays in your pocket, making these accounts a powerful tool for building wealth over time.
For example, Thandi invests R500,000 at an 8% interest rate. In a regular account, she would pay R4,212 in tax on her R40,000 interest, keeping only R35,788. In a TFSA, she keeps the full R40,000, an extra R4,212 every year to reinvest or save.
How to make the most of your TFSA
Before every deadline of the tax year, review your TFSA contributions. Even topping up small amounts can make a difference over time thanks to tax-free growth. Don’t let your hard-earned money sit idle; use your full allowance to boost your savings.
The benefits of a TFSA
In a related article, Briefly News delved into the benefits of a TFSA. These accounts are a smart way for South Africans to grow their money without paying tax on interest, dividends, or capital gains. Designed to encourage saving and reduce reliance on borrowing, these accounts help people build good financial habits over time.
To make the most of a TFSA, it’s important to choose one that fits your needs and investment goals. While TFSAs can benefit nearly all types of investors, the value you get depends on factors like your income, debt level, age, and investment choices. For those earning below the tax threshold, the benefits may be limited, but for many others, TFSAs offer a powerful way to save and invest tax-free.
Source: Getty Images
Professional shows how much tax gets deducted from his earnings
Briefly News also reported on an IT professional on social media who could really use some advice on how to maximise their TFSA account. This was after he revealed how much tax really eats into a Business Intelligence (BI) developer’s salary. The payslip showed a gross monthly salary of R62,480, but after deductions, including income tax, UIF, medical aid, and provident fund contributions, the take-home pay was R41,550.62.
The video posted on 7 February 2026 sparked discussion on how taxes and other deductions significantly reduce earnings for the average South African professional.
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Proofreading by Kelly Lippke, copy editor at Briefly.co.za.
Source: Briefly News
