First, check that the provider is authorised to provide a tax-free investment product. National Treasury and SARS have stated that only specific institutions can provide tax-free investments.

It’s unlikely that the lifetime tax-free investment limit of R500 000 will carry you through retirement, even with high growth. Ideally, your TFSA should complement other investment products in your retirement savings plan.

It’s not about better or worse, really. A TFSA is a valuable tool for long-term retirement savings; due to its tax efficiency, it works beautifully alongside pre-retirement savings provisions. Still got some questions, or just need a bit more clarity? No worries! Have a chat with a financial advisor. They’re like a personal GPS for your finances, ready to guide you through these decisions and tailor a retirement plan that fits just right for you.

They’re flexible! You can use a TFSA for short or long-term savings, but the best way to fully reap tax-free benefits and compound interest is to go long term.

No, but keep in mind that they still count towards your lifetime tax-free contribution limit.

Any withdrawal will reduce your total lifetime tax-free contribution limit. For example, withdrawing R100 000 will drop your limit to R400 000, and any contributions beyond this will be taxable.

While you are free to withdraw from a TFSA at any time, any capital withdrawn cannot be reinvested, as it will count towards your annual and lifetime limits as a new investment. For example, let’s say you’ve already invested R200 000 in your TFSA, leaving you with R300 000 available over your lifetime. If you withdraw R50 000 from your TFSA, your lifetime contribution balance remains unchanged at R300 000.

Anytime you want – it’s your money!

Any TFSA service provider will send you a quarterly rundown of your contributions. They will have a user-friendly online platform so that you can check your contributions whenever you want!

Be ready for a 40% tax on any amount over R36 000.

Top providers will let you set up a monthly debit order or make direct deposits into your account.

Not directly, but you can invest via rand-denominated offshore investments. Your capital will be invested overseas but will return to SA and be converted to rands when you redeem your investment.

Yes, but be sure to keep your total annual contributions within the R36 000 annual limit.

Currently, it’s R36 000 per person per annum, with a lifetime limit of R500 000.

No, just meet the minimum monthly tax-free contribution stipulated by the provider.

No, but be prepared for any minimum monthly payments set by the provider. For Sygnia, it’s R500 per month via debit order.

Just a valid South African ID (or passport if you’re a foreign national), proof of residence and banking details (both less than three months old), and, if applicable, your income tax number. Also, be ready to fill out our application forms and invest at least R500 per month.

We don’t charge any fees to open an account. However, there are various fees associated with administering the tax-free savings account. Those are disclosed when you open the account as part of your application process.

Sorry, TFSAs can only be opened in the name of one individual.

If you choose not to invest the full R36,000 annual limit, it’s important to remember that any unused portion of the limit cannot be rolled over to the next year. For instance, let’s say you only invest R25,000 during the year, leaving R11,000 unused. Unfortunately, that remaining R11,000 cannot be carried forward, and it will be forfeited. So, it’s crucial to utilize your full annual limit to maximize its benefits.

All South African residents are eligible to open a TFSA, including parents/guardians for their children.

Well, unlike protected retirement funds, creditors can seize TFSA funds. Also, unintentional over-contributions can lead to tax penalties. So it’s crucial to know the rules and track your contributions. Also, you can withdraw money from your TFSA whenever you like, but keep in mind, any money you take out can’t be put back in. It’s because any reinvestment is seen as a new investment and it’ll count towards your yearly and lifetime limits. So let’s say you take out R100 000 – this will shrink your lifetime limit down to R400 000. Any money you put in beyond this limit is going to be taxed.

Loads! You can open multiple accounts, access your cash whenever you like and choose from diverse investments like ETFs, fixed deposits and unit trusts. But remember the total amount you contribute to your TFSAs cannot be more than your available TFSA contribution available for that year and your lifetime.

Yes. Whereas a retirement annuity falls outside the estate of an investor upon his/her death, a TFSA forms part of the estate, so the investor can appoint a beneficiary.