nottheaverageactuary

Actuarial news and views from Cape Town and beyond

FNB Tax Free Saving: Quick And Easy

2 Comments

I thought since we did External Environment at the beginning of the course, it would be nice to read an article on impact of one of the factors, Tax in Financial providers. FNB has introduced a new Tax free Cash deposit account that targets individuals who’d usually use their retirement funds on emergency situations or those that are dependent on expensive debts because of lack of savings. So, FNB is trying to encourage and incentivize savings by offering a tax free cash savings option that charges no fees when you take out your investments, no tax on interest earned, dividends received or capital gains. It a good idea as members will save on tax and be exposed to better growth prospects of the stock market. Minimum investment allowed is R1000, making it easy for all income classes to invest with FNB.

To read more, go to the website below.

 

Source: https://blog.fnb.co.za/2015/03/tax-free-saving-quick-and-easy/

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2 thoughts on “FNB Tax Free Saving: Quick And Easy

  1. So this is an interesting development but is it FNB being randomly creative or is there more going on here? Check out the origin of these products here: http://www.treasury.gov.za/publications/RetirementReform/20140314%20-%20Tax%20free%20savings%20accounts.pdf

    • It seems like they duplicated the non-retirement savings because the product features are completely the same. In the link, they said something about the interest tax exempt not increasing in value with inflation, hence real value of the tax exempt interests will erode over time. Their savings account are long term and hence giving savings time to accumulate in value. But are the interests enough to cover expenses, tax that could have been deducted and the profit margin?

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