A tax-free savings account is a savings or investment account where you pay no tax on the interest, dividends or growth. Over many years, that adds up.
The limits
SARS sets a yearly limit and a lifetime limit on how much you can put in. The amounts change from time to time, so check the current ones on the SARS website before you start.
The rule that catches people out
If you put in more than the yearly limit, you pay a penalty on the extra. Taking money out does not give you that room back. Withdraw R5,000 and you cannot put it back without it counting again.
Who it suits
People saving for something at least five years away. If you might need the money soon, an ordinary savings account is usually a better fit.