Invest in tax-free savings today

It’s a sure-fire way to make sure your money works for you

As we strive for financial security, we’re constantly looking for new ways to save, so it’s a good idea to consider a Nedbank Tax-free Savings account.

‘Your money shouldn’t sleep while you do. It should grow wherever it is, and that’s the beauty of tax-free investing,’ says Sisa Cikido, Head of Retail Investment at Nedbank.

During this pandemic, many South Africans fell back on their savings. And as we navigate recovering financially postcovid-19, it’s easy to continue our negative spending habits instead of thinking about our long-term savings.

‘In 2015, our government introduced tax-free savings to encourage us to save. South Africans’ mentality is usually consumer-driven, which isn’t a bad thing, but we need to balance that with our savings. And one such vehicle to help you grow your money optimally is a tax-free savings account,’ says Cikido.

‘Putting your money in one of those is better than leaving it in a current account because you still have access to it, but you can save your money at no additional fee.

‘When you invest your savings in an interest-bearing account, its interest is taxable. If you’re under the age of 65, any amount under R23 800 isn’t taxable, but you pay capital gains tax on any interest that exceeds that amount. That threshold is higher for investors over 65.’

You can open a Nedbank Taxfree Savings account for as little as R500, and you won’t have to pay tax on any interest you earn.

Cikido explains that it’s crucial to leave your savings in this type of account so it can grow. ‘If you withdraw money, you can’t put it back. So, let your interest compound.’ And she cautions that you’ll be taxed if you over-contribute.

‘To make it easy for you, Nedbank doesn’t allow you to contribute an amount above your threshold.

‘Saving is about psychology. I like to say, pay your future self before your current self. Before you spend, we want you to be able to tell yourself in 20 years, ‘I’ve saved enough for my retirement.’ It’s never too late, or too early, to save, no matter your age, and no amount is too small. You’ll never regret saving.’

If you’re a Nedbank client you can open a Tax-free Savings account on the Nedbank

Money app. If you’re not a Nedbank client, you can visit our online banking through nedbank.co.za, call our contact centre or visit any of our branches nationwide.