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HOW IT WORKS
The power of tax-free growth
It’s a tax-free savings account, which is an investment vehicle that allows you to contribute up to R46,000 a year, and R500,000 over a lifetime, across financial service providers.
With Sanlam, you have the added flexibility of allocating your investment across an Investment Fund and a Savings Fund.
fund fact sheets
How your money is invested
When you invest in a Tax-Free Investment, you can choose how it’s structured. Select one of two underlying funds based on your preferences, or choose a combination of both.
Savings Fund
For investors who are risk-averse and seek returns that are higher than banks.
- Best for short-term goals or emergency savings
- Low risk – aims to protect your capital
- Returns are steady but modest (generally beats the interest you’d receive at the bank)
- Money is invested mainly in cash, bonds, and money-market instruments
- Ideal if you don’t want big ups and downs
Investment Fund
For investors looking for diversity, and exposure to local and international markets.
- Best for medium to long-term goals (3+ years)
- Moderate risk – accepts some ups and downs for better growth
- Higher potential returns over time
- Invests across shares, bonds, property, and offshore markets
- Ideal if you’re comfortable staying invested through market changes
FAQs
Your questions answered
Why save in a tax-free savings account?
Your money can grow faster in a tax-free savings account compared to a regular savings account because you don't pay tax on the investment return.
A tax-free savings account is therefore an effective way to save for your goals, because any interest, dividends or capital gains from your tax-free savings account will be free of tax.
Saving in a tax-free savings account gives you flexibility as you don’t have to commit to any future contributions. You can withdraw from your investment at any time. Withdrawing funds, however, may prevent you from reaching your savings goals, and will use up part of your lifetime limit for tax-free savings.
What are the tax benefits of saving in a tax-free savings account?
Contributions to a tax-free savings account are made from post-tax income.
A tax-free savings account is therefore an effective way to save for your goals, because any interest, dividends or capital gains from your tax-free savings account will be free of tax.
No tax is payable on withdrawals.
How much can I save in a tax-free savings account?
National Treasury has put limits on the amount you can save in a tax-free savings account. The total annual contribution in a tax year may not exceed the annual contribution limit, which is currently R46 000 per tax year. The total lifetime contribution may not exceed R500 000. Make sure you keep track of how much you've paid so that you don't exceed your limit across all approved tax-free savings accounts (at Sanlam or other providers).Does the returns on my tax-free savings account affect contribution limits?
No, reinvested returns such as interest, capital gains or dividends do not count towards your contribution limits. The annual or lifetime contribution limits only apply to the amount that you have contributed on your tax-free savings account.Can I have more than one tax-free savings account?
Yes, there are no limits to the number of tax-free savings accounts that you can have at Sanlam or other provider. However, make sure you keep track of how much you've paid so that you don't exceed your limit across all approved tax-free savings accounts.
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