Finding the right Tax-Free Savings Account (TFSA) takes careful consideration because it affects your future.
But there are A LOT of options out there. So you could spend days scouring the internet in search of the best tax-free savings account.
Choosing the best TFSAs South Africa has to offer can go a long way towards maximising the return on your tax-free savings (or investments).
Luckily, we’ve done the groundwork and compiled a list of the best of the best for you.
Check it out.
Best tax-free savings accounts in South Africa
Before we get into it, please familiarise yourself with the tax-free savings account rules (set by SARS), if you haven’t already. There are a couple of things that you should keep in mind before opening your tax-free savings account.
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Here’s the full list of tax-free savings accounts that we’ll cover:
- EasyEquities TFSA
- Allan Gray TSFA
- Ninety One TFSA
- Fedgroup TFSA
- Satrix TFSA
- Coronation Tax-Free Investment
- OUTvest tax-free
- Sygnia TFSA
- Investec TFSA
- African Bank TFSA
- Capitec TFSA
- Discovery TFSA
- ABSA TFSA
- Old Mutual TFSA
- Standard Bank TFSA
- Nedbank TFSA
- FNB TFSA
Please keep in mind that most of the companies on this list offer other savings and investment options too. So make sure that you choose their dedicated tax-free account or service.
EasyEquities TFSA
EasyEquities (EE), provides anyone with an opportunity to buy shares of the brands and companies they care about. You can grow your wealth with whatever amount you have available to invest and the platform allows you to invest your tax-free savings in stocks or ETFs, which means you could get a greater return in the long run.
Make sure that you use the TFSA account for your tax-free investments.
Allan Gray TFSA
Allan Gray allows you to invest in unit trusts via its tax-free investment account which is a useful product for estate-planning purposes.
Quick note: Allan Gray are aligning themselves with the new off-shore limit stipulated by the South African Reserve Bank which is now at 45%.
Ninety One TFSA
The funds in the Ninety One core range have different risk and return profiles, which clearly address the diverse and changing needs of investors.
Their funds invest in local, global and emerging markets, and span equity, fixed income, multi-asset and alternative asset classes.
Select one or more funds from the Ninety One range of funds to match your investment time frame and risk tolerance.
Fedgroup TFSA
The Fedgroup Tax-Free Savings Account offers a double-digit, guaranteed effective annual return of 10% per annum, which is calculated in accordance with regulation 10A and currently fixed until 29 February 2024.
Plus, they offer estate administration in the event of death, so your beneficiaries can receive the proceeds faster, and less hassle.
Satrix TFSA
SatrixNOW is a digital investment platform that makes it simple to invest and grow your money in a tax-free savings account.
The app makes it easy to invest and you can see all the costs involved, plus send investment vouchers as gifts.
Coronation TFSA
At Coronation, there are no initial or annual fees.
Instead, investing in an underlying fund/funds will incur annual management fees.
They have a number of investment options available such as Coronation Balanced Plus, Coronation Balanced, Defensive, Coronation Capital Plus, Coronation Market Plus and so much more.
OUTvest TFSA
The OUTvest investment is not simply a tax-free savings account, because you’re not just saving your money, you’re investing it.
They’ve used over 115 years of market and economic data to design a set of investments that are suitable for almost anyone – including four passive multi-asset funds and one actively managed money market fund.
Sygnia TFSA
The Sygnia Tax-Free Savings Account is a savings account that allows you to save for both short-or long-term goals without paying taxes on any of the growth or income you earn.
In addition, you are not taxed on withdrawal or termination of the account – and you have instant access to your money whenever you need it.
We’ll take a moment to remind you that it is best to leave your tax-free savings invested for as long as possible, and that withdrawn funds still count towards your contribution limits.
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Investec TFSA
Investec offers a 12-month fixed deposit that allows investors to enjoy a preferential rate designed to maximise the savings potential in line with an initiative with the National Treasury.
African Bank TFSA
With African Bank, you can save by investing your money at market-leading rates with non-taxable payouts. You can also calculate your investments over time straight from the website.
Capitec TFSA
With Capitec Bank you choose an investment term from 12 – 60 months and they also estimate what the interest rate will look like during specific periods.
Discovery TFSA
You can open a free Discovery Tax-Free Notice Savings Account in as little as five minutes and manage accounts easily in the Discovery Bank app.
Discovery is known for exclusive benefits, world-class service and enhanced rewards, so they could be a good choice for you.
ABSA TFSA
ABSA’s TFSA requires R1 000 to open an account with no monthly management fees.
Old Mutual TFSA
With Old Mutual, you can start investing with as little as R250 a month and pay no taxes on growth.
Standard Bank TFSA
Standard Bank’s opening deposit is R250 and you can earn interest up to 6.25%.
Nedbank TFSA
You can open a Nedbank TFSA with R500 deposit and enjoy no monthly fees or commissions and you can do partial withdrawals with a 24-hour notice.
FNB TFSA
FNB asks for no monthly fee, you can manage an account online and access your money within 32 days.
Final thoughts
It may feel like you have a paradox of choice, but simply analyse the pros and cons of each and choose one that works best for you.
Remember that some offer fixed-term deposits, and others offer investment options like ETFs, so consider your goals and choose an account (or accounts) that offer what you need.
Ultimately you will receive tax-free savings on all of them but the sooner you start, the better.
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