Tax Free Savings account

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Emma Watts
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1 Tax Free Savings account

2 Tax Free Savings account? What is a Tax Free Savings account? In an effort to encourage savings, and promote growth in the economy, the South African Government enabled financial service providers to offer tax free savings and investment accounts. These accounts are available, effective 1 March Tax Free Savings accounts allow individuals the following: To contribute up to R per year or R in a lifetime, to tax free savings and investment products. Returns (interest, dividends, capital gains or earnings) on such products are tax free. Contributions in excess of the above limits will be taxed at 40% or as determined by the South African Revenue Service (SARS) A number of tax free savings accounts can be opened, however, the R annual and R lifetime limits apply per individual, to all tax free savings products in all financial institutions combined. What does Standard Bank offer? In support of this initiative the Tax Free Call is available through our branches. The product is available to customers in their individual capacity, therefore Business or Commercial banking customers may not open a tax free savings account. Product Features and Benefits Minimum opening deposit of R250 Minimum transaction amount of R250 No monthly management fees or commissions are charged Cash or cheque deposit fees are not charged No fees are charged for inter-account transfers into the account A branch withdrawal and Bank cheque fee apply Functionality is limited to transfers and withdrawals. 1

These accounts are available, effective 1 March 2015.

3 Debit and cheque card swipes, debit orders or third party payments are not allowed from the account Maximum deposit contribution, per individual of R per tax year and R over the lifetime of the investor. These limits apply to all tax free savings accounts in the individual s name, and are the combined limits at Standard Bank as well as any other financial institutions Interest earned on contributions does not count towards these limits You may select how you want to make contributions to the Tax Free Call. You can make a once-off deposit, adhoc deposits or arrange a regular stop order as long as the total contributions across all tax free savings and investment accounts do not exceed the annual or lifetime contributions To view our rates offered, visit a branch, call our Customer Contact Centre on or visit the Tax Free Call webpage, under Personal Banking Savings and Investments at Documents required when opening a Tax Free Call account: South African Identity Document Proof of residence (for example, Telephone or utility or rates and levies bill; department store or cellphone account; car registration dated in the last 3 months). A temporary resident requires: A valid passport A valid permit/visa Proof of residence (for example, Telephone or utility or rates and levies bill; department store or cellphone account; car registration dated in the last 3 months). A non-resident (including South African emigrants) requires: A valid passport; A valid permit/visa. 2

These limits apply to all tax free savings accounts in the individual s name, and are the combined limits at Standard Bank as well as any other financial institutions Interest earned on contributions

4 Frequently asked questions (FAQ s) 1. What happens to the current interest rate exemption? The current interest exemption of R for individuals below 65 years and R for individuals above 65 years is still applicable to interest earned on deposits outside the tax free savings account. Any interest earned on deposits and investments within a tax free savings account is tax free. 2. Can I make deposits with various institutions, each with deposits of R each year? The R30 000, is the total limit per individual, per year. In other words, deposits made to all accounts at all financial institutions, combined, must not be more than R30 000, each year. Should you deposit R into a Tax Free Call at Standard Bank, you may not make any further deposits into any other tax free savings account at Standard Bank held in your name, or into any other account at another financial institution. Should the R limit be exceeded, the additional deposits above R will be taxed at 40%. 3. Is my understanding correct that the maximum balance allowable, covering all the relevant accounts, may not exceed R ? No. Your capital contributions (deposits) over a lifetime may not exceed R This means that R per tax year can be deposited, and R in a lifetime (over 16 years). All interest, dividends and capital gains in excess of R may stay in these accounts to accrue even more interest and dividends. 4. May I withdraw my money from these accounts at any time? Yes. Investors will be allowed to withdraw money from these accounts as and when they see fit. However, any withdrawals will still contribute towards the R contribution limit. 3

account. Any interest earned on deposits and investments within a tax free savings account is tax free. 2. Can I make deposits with various institutions, each with deposits of R30 000 each year?

5 For example: If an individual invests R in one of these accounts on March and decides to withdraw R after six months, no further contributions will be permitted, thereafter, as the individual has already reached the annual contribution limit of R for the year, (1 March 2015 to 29 February 2016) and would only be able to contribute in the next year (from 1 March 2016 to 28 February 2017). 5. Will my existing investment account automatically qualify as a tax free investment? No. If you would like your current investments to qualify, you will have to open a Tax Free savings account and transfer funds into the account. 6. Can I open a tax free account in the name of a minor? Whilst accounts can be opened in the name of a minor all deposits in those accounts must remain in the name of the minor if withdrawn during the period. Contributions will also be considered as part of the lifetime limit of R of the minor. Should you seek financial advice in terms of the Financial Advisory and Intermediary Services Act (FAIS), contact our FAIS Advisory Call Centre on Disclaimer Our products and services, and the terms under which they are offered, may change. We will inform you within a reasonable time of these changes. It is in your interest to read your contract carefully. If you have any questions or need more information please contact your branch. Standard Bank subscribes to the Code of Banking Practice. Please ask your branch for details. Standard Bank supports the Ombudsman for Banking Services Sharecall number

28 February 2017). 5. Will my existing investment account automatically qualify as a tax free investment? No.

6 Authorised financial services and registered credit provider (NCRCP15) The Standard Bank of South Africa Limited (Reg. No. 1962/000738/06). SBSA /15

Tax-Free Savings account

Tax-Free Savings account What is a Tax-Free Savings account? In an effort to encourage South Africans to save, and promote growth in the economy, the South African Government have introduced Tax-Free Savings