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
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.
The Money Show’s Bruce Whitfield interviews Personal Finance Consultant Samke Ngwenya.
Pravin Gordhan suggests Lynne Brown is experienced in keeping secrets says EWN reporter, Rahima Essop.
DA shadow minister, Natasha Mazzone, says the committee will ensure that those implicated in state capture march to jail.
If the engine is running and you are sitting behind the wheel you are not allowed to operate your phone says W Cape's JP Smith
Coca-Cola has reduced its 500ml "buddy" to 440ml and the traditional 330ml Coke cans will soon have a volume of just 300ml.
Up for a Springboks level scrum? Instructions on how to ensure you get the deals in your inbox the moment they become known...