One of the most encouraging things to come out of South Africa in 2015 has been the tax-free saving account. Since we have so many clients in the financial services industry, we’ve had a lot of exposure to this new way of investing. In fact the tax-free savings account (TFSA) of one of our clients, EasyEquities, was named best TFSA in South Africa for 2015 by Investor’s Weekly and Intellidex.
South Africans of all ages can open TFSAs and invest up to R30 000 per year without incurring tax on any growth on their investments like interest, dividends or capital gains. Some people choose to invest R2 500 per month, some invest the full R30 000 at once, while others put away what they can when they can.
Each year on 1 March a new cycle starts. So if you haven’t invested your full R30 000 in a tax-free account by the end of February, you lose the benefit.
If you have any (or all) of your allowance left, it would be a huge pity to miss the chance to put it in a fabulous TFSA. Here are a couple that we like:
The EasyEquities tax-free savings account allows you to pick your own investments from a list of more than 40 funds. You can invest from as little as R5 and the cost of investment is minimal – in fact, it’s as close to nothing as you’re going to get.
We like this option because it’s easy, it gives you control over where your investments are placed, and it is really cheap. A R100 investment in your EasyEquities TFSA will cost you just 37c!
Find out more about this TFSA on the EasyEquities blog.
Emperor Asset Management
The Emperor IP Momentum Equity Fund launched on 29 April 2015 and delivered a return of 21.3% in its first seven months. So if you’d invested R30 000 on day one, your investment would have been worth R36 390 at the end of November.
We like Emperor because they (like us) are prepared to take bigger risks to ensure bigger rewards. Their risks are calculated very carefully and they take measures to mitigate any downside losses, but their returns speak for themselves.
Read more about the Emperor Asset Management TFSA offering.
MOST IMPORTANTLY: If you haven’t used your tax-free investment allowance yet, don’t delay! The 29 February deadline is closer than you think.
If you loved this blog, please vote for CN&CO in the 2015 South African Blog Awards.