FNB has a lot of investment and savings instruments, among these is a tax-free savings account. This is an overview of how the FNB tax-free savings account works.
What is a tax-free savings account?
A tax-free account is basically any account you invest your money in and not pay any interest on your yield. If for example you invest R30k then earn an interest of 5% (R1 500), you won’t have to pay tax on it.
Generally speaking, you don’t have to pay any tax on any interest income if the interest received is less than R23 500 and is from a South African source. You can invest a maximum of R36k per year into a tax-free account and R500k over the course of your life.
You can use a tax-free account to invest in stocks through an ETF, you won’t have to pay tax on any interest or capital gains. Which can be very lucrative for a long-term investor.
How does the FNB tax-free savings work?
FNB offers a tax-free deposit account, it has a minimum deposit of R1000, and you can earn up to 3.97% in interest. There are no monthly fees, which is great because they usually cut into your interest. You can make additional deposits into your account after your initial deposit, as long as the total for the year is under R36k.
To withdraw your money, you have to give a 32-day notice. You can earn your interest on a monthly basis. Which you can transfer to any account or leave it on the tax-free savings account.
Conclusion
This was an overview of how the FNB tax-free savings work. Do you have any thoughts or questions? Comment below.
