Tax-Free Season Is Coming To An End

The benefits are in the name — Tax-Free. That means that the interest you accumulate in this type of account will not be taxed. The Tax-Free Investment account works best as a long-term option, which allows you to take advantage of compound interest.
 
Compound interest is where the interest you earn on your investment creates an even bigger savings total, which then earns even more interest. The longer you leave the money in the account, the greater your investment will be. This rule applies to dividends too.
 
That makes it perfect for goals you have set for yourself that can only be realized in a few years’ time. With a Tax-Free account, you can start small, with investments from as little as R500, while benefitting from a proper investment strategy, as compared to a savings account.
 
The interest, capital gains, and dividends you earn are completely tax-free. Your investment can be paid to your beneficiaries immediately and there are no executor fees.
 
There are, however, some rules attached to the Tax-Free account. You can only invest up to R36 000 a year, and up to R500 000 in your lifetime. Your access to the money also comes with conditions and the contribution season stretches from 1 March to 28/29 February for your R36 000 yearly amount.
 
To find out more or to maximize your early contribution, please click on the “speak to a financial advisor” button below.
 
The golden rule it is time in the market not timing the market. Happy investing your LVC team

This Article was wrote by Rudolf Froneman