According to the amended Tax laws in South Africa, individuals can invest up to R33 000 per year towards a Tax Free Savings Account. Contributions are capped at a lifetime limit of R500 000.
More about the Tax Free Savings Account:
This type of account is not intended for short-term savings but is ideal for achieving long-term investment goals.
It’s good for saving for retirement when your income is below the income tax threshold. It’s also good for topping up retirement savings over and above the maximum amount per annum that one can receive tax breaks on.
A Tax Free Savings Account is also ideal for saving for retirement when you are uncertain about your long-term income or job security.
This type of account has been designed for a specific purpose and offers novel benefits.
Parents can also invest in their children’s names for the long term.
A Tax Free Savings Account may also be ideal if you are saving for retirement if you are uncertain whether you will emigrate.
This type of account is also an ideal place to store money that you don’t want to spend on monthly expenses, but that you may wish to use in the near future.
A high interest savings account like a Tax Free Savings Account can also be a great place to keep and grow your emergency fund. You can store some money away that will be enough to cover at least three to six months’ worth of expenses.
Various financial institutions offer this type of account with different interest rates. Savings accounts are a popular way to save money and grow your capital. It’s important that the interest rate that is earned keeps up with or is ideally ahead of inflation. You need to do the necessary research to find the right type of savings account with high interest rates.
A Tax Free Savings Account is an ideal place to keep your emergency fund or any money to which you still need ready access.