South Africans do not save enough.
There are many reasons for this; one of them being the disincentive of paying tax on investment returns.
For this reason, Treasury introduced tax free savings accounts on 1 March 2015.
All proceeds (dividends, capital gains or interest) of investments in these accounts are tax-free.
After four months 35 384 South Africans opened an account.
A third of these accounts were opened by first-time savers, which is exactly what Treasury had in mind with this innovation.
Most of the money – about two thirds - is going into shares.
This is encouraging, because it's the best way to get the most benefit from these accounts.
The Money Show’s Bruce Whitfield interviewed Stuart Theobald, Chairman of Intellidex, about the success of these wealth-boosting investment accounts.
Scroll down for quotes from the audio below.
After four months just over 35 384 accounts have been opened. This is pretty good!— Stuart Theobald, Chairman of Intellidex
Half of tax-free savings accounts came in a “life policy” wrapper.— Stuart Theobald, Chairman of Intellidex
About 6000 accounts are unit trusts.— Stuart Theobald, Chairman of Intellidex
About a third of the accounts have been opened by first-time savers. This was exactly what Treasury had in mind. This is a really good result.— Stuart Theobald, Chairman of Intellidex
We excluded the big banks from our research as they weren’t willing to share information.— Stuart Theobald, Chairman of Intellidex
Most of the money is going into shares – about two thirds. This is encouraging, because this is how to get the most benefit from these accounts.— Stuart Theobald, Chairman of Intellidex
Investing R30 000 a year can turn into millions in the long-term.— Stuart Theobald, Chairman of Intellidex
For more information on tax-free saving go to www.savetaxfree.co.za.— Stuart Theobald, Chairman of Intellidex
Recommendedby NEWSROOM AI
No Capital Gains Tax, no Dividends Tax, no Income Tax from interest earned… How to get the most from a Tax Free Savings Account.
Galileo Capital Financial Advisor Warren Ingram researches Tax Free Savings Accounts and discusses his favourite ones.
Minister Nene formally introduced tax-free savings earlier this year. Financial Planner Gregg Sneddon's wide-ranging discussion...
Tax Free Savings Accounts can be powerful wealth creators, if you use them right. Here's how...
Savers rejoice! On 1 March 2015 government introduces tax free savings accounts. Financial planner Claude Hannah explains…
Is there a single best way to build your wealth so you can retire with dignity? Yes, there is, despite costs and limitations.
What will happen to the rand if it does? Bruce Whitfield interviews Tim Nhamo, a currency specialist at Ironhead Trading.
The ANC is eyeing your pension. Bruce Whitfield interviews Warren Ingram, a personal financial advisor at Galileo Capital.
It's not your imagination; we’ve lost a decade. Bruce Whitfield interviews Johann van Tonder, a researcher at Momentum.
The health programme piloted a new tag system at the exit points in a bid to crack down on fake gym visits at a few fitness clubs.
Astrologer from Soul Direction Dawn Carter gives us a horoscope forecast for South Africa in 2019.
EWN's Clement Manyathela describes testimony given by Angelo Agrizzi at the Zondo Commission of Inquiry into State Capture.
Khabazela shares tweets and Facebook posts that have gone viral.
Bruce Whitfield interviews the legendary Springbok about his attitude toward money (hopes and fears, successes and failures, etc.)