If you want to learn about the Absa tax-free savings account in South Africa, then check out this guide.
A tax-free savings account is a type of account where you do not pay taxes on the interest earned from the account.
The account is the perfect way to grow an easily accessible emergency fund.
We will show you the requirements to apply for this account.
Requirements For Tax Free Savings Account
Below are the primary requirements to apply for the tax-free savings account:
- Should be above 18 years
- South African ID
- You need proof of residence, such as a utility bill not older than 90 days
- An initial deposit of R1 000
These are the primary requirements to apply for the Absa tax-free savings account in South Africa.
Absa Tax-free Savings Account
To open an account, you will need at least R1 00, and you can add to your savings whenever it suits you.
You are guaranteed capital and returns.
There is no monthly management fee charged on this account, and you get a reduced brokerage of 0.2%.
The limit for your tax-free savings is R36 000 per tax year and R500 000-lifetime limit.
If you make contributions above R36 000, you will be penalized 40% of the amount payable to SARS.
Investment with this account is fixed for 12 months, and the interest will be paid upon maturity.
You get a tiered interest rate that increases as your savings grow.
You can link this account to your other existing Absa accounts.
This is how the Absa tax-free savings account works in South Africa.
What Is The Tax Deductions
You are not charged any security transfer tax on purchases you make from the account.
There is no capital gains tax when you sell products using this account.
There Is no dividend withholding tax on the dividends earned from the account.
There is no tax on the interest earned.
You get both local and international exposure from all approved ETFs.
This is all you need to know about Absa tax-free savings account in South Africa.