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11 reasons you are struggling to save money

There are many reasons  people struggle with saving money. Many factors that we are sometimes are unaware of. In this article we will discuss some of these reasons.  11 reasons you are struggling to save money 1.Cost of living It would be an injustice to talk about saving money without acknowledging the cost of living. The inflation rate keeps rising which means prices are hiking while our income remains the same.  High costs of living, such as housing, healthcare, and education, leave little room for saving after meeting essential needs. 2. You don't Budget (or stick to it) A budget is to your finances what water is to your body. You might survive a day or two without it but in a long term you will feel the effects. Without a clear budget, it's challenging to track income, expenses, and savings. Overspending becomes common, making it difficult to save 3. You live beyond your means Spending more than you earn will leave you with nothing to save.  Spending more than w...

8 Best TAX FREE SAVINGS ACCOUNT IN SOUTH AFRICA

 

Tax free savings account in South Africa. Nothile finance TFSA

Tax free savings account is a tax-free investment option. It was introduced on 1 Mar 2015. The aim for tax free investments is to encourage household savings. To encourage people to save more. You dont get taxed on this investment.

How does tax free savings account work?

•You can invest up to R36 000 per annum.

•Your lifetime investment limitation is R500000

•Any amount exceeding R36 000 p.a or R500000 in your lifetime will be subjected to 40% tax.


•For example, if you invest R38 000 in a year, only R2000 will be taxed. The R36000 will be exempted.

•You do not pay income tax, dividend tax, or Capital gains tax (CGT) on a tax free savings account.

•You can have more than one TFSA with multiple providers. 

•But the amount you invested will be aggregated and should not exceed the annual and lifetime limits.

•Interest earned will not be taxed

•Money withdrawn cannot be replaced. This means that if you invest R200000 and withdraw it, your lifetime investment will still be R200000 & you will be left with R300000 lifetime contribution to make.


You are probably asking yourself, what about interest? The interest rate or return on investment differs from one bank to another. Dont worry, I will definately compare the banks in this article. 


Tips on how to use tax free investments effectively 

•You can use it as a sinking fund 

•You can save for your kids school fees or university tuition


Tax free savings account Providers in South Africa and TFSA interest rates

1. Allan Gray

Allan Gray offers tax free investment at an interest rate of insert interest. 

You have to have an ongoing debit order at a minimum of R1 000.

2. African Bank

African Bank has requires you to have a minimum balance of R50.00 at all times. 

 You can open a tax free account online with African Bank. The interest rate is upto 9%. 

You can access your funds after every twelve months, at the anniversary of your investment.

3. Sanlam

Sanlam requires a minimum of R500 per month or a lumpsum of R10 000 to open a tax free savings account. The interest rates are not disclosed on their site (I am sorry).


4. ABSA

ABSA offers four types of tax free investments. The tax free savings account, which you can open with a minimum of R1000 and it has tiered interest rates.

 The TFIA which requires a minimum deposit of R10000. 

TFFDA with a minimum deposit of R30000, once off, and 8.70% p.a interest. Interest is payable at maturity.

And lastly, TFIA in which you can invest in unit trusts, wrap portfolios, and exchange traded funds. You will need to invest a minimum of R10000.

Side note: Check fixed deposit options here

5. Old Mutual

You can start investing for as little as R250 with Old Mutual.

6. Standard Bank

Standard Bank requires a minimum of R250.00. You can access your funds anytime you need them.

 You can earn upto 8.25% interest on your tax free investment.

7. INVESTEC

The minimum deposit required by Investec to open a tax free savings account is R30 000. 

The interest rates are not disclosed.

8. DISCOVERY BANK

You need a minimum of R1000 and you can add to your investment at anytime. 

You will earn an interest of 4.85% and will not pay any monthly banking fees.

Conclusion

Tax free investments are meant to create and grow your savings. Let them grow and do not be hasty in withdrawal. 

Let me know what you think in the comment section below 

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