Save your bonus and invest

Saving for a good education is never easy, and any parents are unable to save enough to be able to comfortably fund their children’s tertiary education.

This festive season, avoid spending all your bonus on shopping and rather put the money aside for your children’s education in a tax-free savings account.

A tertiary degree or diploma is essential when looking for good employment. If parents are not saving enough, their children can be forced to seek out student loans and bursaries or work part-time to cover these expenses.

The JSE Tax-Free Savings Account is a hassle-free way to ensure your children receive a good education in the future from a reputable institution.

“The savings account provides investors with a way to invest in Exchange Traded Funds (ETFs) which are ideal for first-time investors looking to invest in the stock market as they provide a basket of JSE-listed indices by tracking a particular stock market index, such as the FTSE JSE Top 40,” said Mpho Ledwaba, head of marketing at JSE.

Read: Tips to save on personal investments

He elaborated on some of the benefits, “A small initial investment amount is required to begin investing in our tax-free savings account. ETFs are effective in providing a hassle-free opportunity to investors to help them gain exposure to a variety of different securities. For the novice investor, the JSE TFSA offering also gives investors the potential to diversify their investment by providing them with exposure to a variety of underlying instruments such as equities, bonds, and commodities.”

It caters for all because it offers flexibility to either make a monthly contribution or a once-off lump sum, depending on the needs. Ledwaba said JSE’s TFSA is one of many initiatives by the exchange aimed at improving financial literacy and investor education. The JSE runs the annual JSE Investment Challenge, intended to increase understanding about financial markets in high schools and tertiary students.

“The JSE is committed to making the exchange more accessible. Our intention is to ensure that South Africans establish a culture of investing. Investing doesn’t have to be a daunting task. We hope to make investing easy and more affordable for all South Africans,” concluded Ledwaba.

Details: https://www.jse.co.za/taxfree

Key features of the JSE Tax-Free Savings Account

• Investors are allowed to invest up to R30 000 per annum in monthly payments and limited to R500 000 lifetime contribution
• Investors invest in one of the JSE-listed Exchange-Traded Funds which provide diversification by buying into a basket of JSE-listed investment products
• You have the flexibility to either contribute monthly or as a once-off lump sum depending on your needs (limits apply)
• No tax on interest earned
• No dividend withholding tax on dividends earned
• No capital gains tax
• No securities transfer tax on purchases.