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What is a tax-free savings account (TFSA)?

As an EasyEquities client, you are automatically provided with a TFSA when you register with us.

TFSA stands for Tax Free Savings Account. A Tax Free Savings Account allows you to invest up to R500 000 without paying any tax on the profit you make on your investment, the dividends you receive, or the interest you might earn on cash.

There are a couple of restrictions though:

  • You can only invest up to R36 000 within a financial year (1 March – end Feb) in this account.
  • You can only invest in Collective Investment Schemes (ETFs fall under this category) and not single shares.

If you exceed the annual (R36 000) and lifetime (R500 000) limits, SARS will penalize you - 40% on the excess.

Luckily EasyEquities will prevent you from over contributing in the TFSA you hold with us, however, we can’t monitor TFSA contributions you make elsewhere. The tax exemption is based on individual capacity

Any amount that you withdraw from your account will count towards your annual and lifetime limit. If you have deposited R36 000 and withdraw R15 000 in the same year, you cannot deposit any more funds as you have already used your R36 000 deposit allocation.

Watch our video on TFSAs here.

How much does a TFSA cost?

Like any of your EasyEquities accounts, there is no minimum amount needed to start using your TFSA.

You can view a summary of all costs relating to a TFSA in our cost profile.

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