|South Africa's Tax-Exempt Accounts Find New Savers|
There has been a significant number of new savers opening tax-free savings accounts (TFSAs) in South Africa since they were introduced on March 1, 2015.
Out of 35,384 TFSAs opened in the four months to end-June 2015 (including stockbroker accounts, collective investment schemes, and life insurance policies, but excluding bank deposits), 32 percent are believed to belong to first-time savers.
65.5 percent of the total ZAR284m (USD21.3m) in those accounts is invested in equities, and cash holdings accounting for 20.7 percent. Other investments have been made in bonds, commodities, and property.
TFSAs were introduced as an incentive to encourage households to save. TFSAs have a maximum annual contribution limit of ZAR30,000 and a lifetime limit of ZAR500,000 per person. Proceeds are exempt from income tax, dividends tax, and capital gains tax.
The opinions expressed do not constitute investment advice and specialist advice should be sought about your specific circumstances.
Published on our website on Oct.14, 2015