Advertise Here


IconAdministration Outsourcing
IconAsset Managers
IconAssociations & Institutes
IconBBBEE Consulting and Verification Agencies
IconBusiness Chambers
IconBusiness Process Management
IconBusiness Process Outsourcing
IconConsumer Protection
IconCorporate Governance
IconCredit Bureaus
IconDebit Order Collection Facilities
IconEducation and Training
IconHuman Resources
IconInformation Technology and Software Partners
IconInvestment Consulting
IconInvestment Fund Managers
IconListed Equities
IconParticipation Bond Managers
IconPolicy Administration
IconPolicy Trading
IconProperty Unit Trusts (PUTS)
IconRegulatory Authorities
IconStock Exchange
IconSurveys and Research
IconTraining Courses & Workshops
IconUnit Trust Fund Managers
IconWellness Programs
  Subscribe To »

Tax free investments for your child’s future






Jan van der Merwe, Head of Actuarial and Product, PSG Wealth

Ensuring there is money aside for the future of your children is an essential part of being a parent. Be it that you’d like to start saving for your child’s tertiary education or you would like a few years to get together a nest egg for your child to boost his or her own savings, a Tax-Free Savings Account (TFSA) can be a useful product to invest in.

A TFSA can be held by any natural person who is South African. These products exist because of government’s drive to improve South Africa’s savings culture, so it’s worthwhile considering the benefits.

It would take approximately 15 years to reach the tax-free savings lifetime contribution limit of R500 000 if you were to contribute the annual limit of R33 000 (these are the stipulated maximum amounts by law to invest in TFSAs). If you start saving when your child is a toddler, you would have a sizeable sum of money that would easily cover university expenses and provide your child with a considerable financial head start.

However, you don’t need to contribute up to the limit, and you are allowed to stop contributing as you see fit. The minimum, or more affordable investment limits may be paid either monthly, quarterly or annually, depending on the product provider you choose.

The good news is that even if you stop contributing, the investment will continue to grow as it compounds interest, all the while adding up to a meaningful sum of money for your child. It’s also an opportunity to teach your child about the importance of saving and how savings can grow when you exercise patience.

We all know how expensive university is, or the cost of buying a car for your child, as well as how difficult it is for young people to afford to put a deposit down on a house, so this savings plan could solve the costly necessities, or benefit your child’s own financial future exponentially, even  serving as an emergency fund.

A TFSA ensures that investors (the person whose name the account is in, i.e. your child) will not pay any tax on the growth of the investment, or when the money is withdrawn. Money can be taken out of the investment at any time, but will not alter the contributions. The limits of R33 000 per year and R500 000 per lifetime are strict in exchange for the tax-free withdrawal benefit. Failing to stay within these limits will attract further tax consequences, so if you are able to contribute substantially, be aware of the ceiling.

It is important to note that the investment will pertain to your child’s name and ID number. If you don’t contribute to the limit, your child can take over saving into the account once he/she is earning. Though you as the parent are making the contributions, you will still be able to open your own TFSA as well, to give your personal savings a boost.

Source: Catherine Riley: Claire Densham Communications
« Back to previous page Print this page » |

Breaking News »

The Imminent Reality of Cyberattacks for Business

No longer an if, but when a business will experience a cyber attack Participants in Aon's 2019 Global Risk Management Survey ranked cyberattacks and data breaches as #6 in the top 10 risks facing organisations ...
Read More »



CGF is delighted to welcome Travers Cape as a Lead Independent Consultant to our company. Travers has acquired a wealth of experience in senior financial management positions and fulfilled various strategic ...
Read More »


Solving the retirement savings challenge

Lessons from around the world   Around the world, workers are being compelled to take more responsibility for their retirement savings as many employers move from traditional Defined Benefit (DB) ...
Read More »


Asia Corporate Payment Survey 2019: Deteriorating payment trends amid trade war woes

Coface’s 2019 Asia Corporate Payment Survey covered over 3,000 companies in nine economies (Australia, China, Hong Kong, India, Japan, Malaysia, Singapore, Thailand and Taiwan). 63% of companies surveyed ...
Read More »


More News »


Healthcare »


Life »


Retirement »


Short-term »

Advertise Here

Have Your Say »

Is insurance a priority for South African millennial's

|Results »
Advertise Here

From The Glossary »


Life Annuity:

A sum payable at defined intervals during the continued lifetime of an individual.
More Definitions »






Contact IG


Media Pack


RSS Feeds

By using this website you agree to the Terms of Use.
Copyright © Insurance Gateway (Pty) Ltd 2004 - 2019. All Rights Reserved.