What is a Tax-Free Investment?

The Tax-Free Investment is an opportunity for investors to gain full benefit of their capital
plus profit earned which is not subjected to any tax implications.

Who should invest in a Tax-Free Investment?






Professionals* / Business people*




Pensioners* / Retirees*

*With the primary requirement being a South African permanent resident.

Why Should I Consider a Tax-Free Investment with Al Baraka Bank?

Shariah Compliant
Shariah Compliant
Shariah compliant / permissible returns on investment.
Monthly Profits
Monthly Profits
Profits will be capitalised into your Tax-Free Investment account at the beginning of every month without affecting your contribution limit.
Secure Investments
Secure Investments
Secure investments that are socially responsible.
Consistent Returns
Consistent Returns
Long history of providing consistent returns with Shariah investments.

Frequently Asked Questions

Minimum of R1000 when opening the account. Thereafter, minimum deposits of R250 – but must not exceed R36 000 per tax year.

**There is a R36 000 contribution per tax year and a R500 000 lifetime contribution limit.

The penalty for exceeding these contribution limits is a 40% tax on the amount that is in excess of the limit.

You will be allowed a maximum of one withdrawal per tax year with a minimum withdrawal amount of R500 and maximum withdrawal amount being the total value of your investment.

**Annual and lifetime contribution limits are subjected to amendments by Legislation from time to time

  • Bar-coded identity document or smart card ID
  • A utility bill, not older than three months, for the verification of residential address in line with FICA requirements

All deposits and withdrawals will be subject to ABL’s banking fees.

Islamic investments earn a return based on a profit sharing model. Any income earned through the bank’s financing operations are then shared between the shareholders and the bank’s depositors. As the income earned by the bank varies week on week, so too would the rate offered on the product.

The returns on the product are marginally different to those of other banking institutions, based on the Shariah-compliance cost involved in offering an Islamic alternative to conventional banks.

Profit rates are revised weekly, based on the profit earned through the bank’s financing operations during the preceding week. Profit rates, even though revised weekly, are relatively stable.

Yes, it is possible to have more than one tax-free investment or savings account at different financial institutions. However, at Al Baraka Bank, we only allow one tax-free account per individual. It is important to note that the annual and lifetime contribution limits across any number of tax-free savings accounts with any number of institutions collectively may not exceed their respective contribution limits.

Tax-Free Investment Advantages Tax-Free Investment Limitations
Invest from as little as R250 Only Allowed a Maximum of R36 000 per Tax year
Shariah Compliant returns on your investment Penalised if you exceed your Annual Contribution Limit
No Tax on Investment Income Does not replace retirement annuity
No Monthly fees Profits paid upon maturity of investment

Kindly note that penalties are applicable for investments that are made which are in excess of the annual and lifetime contribution limits.

Kindly familiarise yourself with all terms and conditions and legal requirements pertaining to the Tax-Free Investment as noted in the regulations in terms of Section 12T of the Income Tax Act of 1962, on the requirements for Tax-Free Investment

For more information please click here.

Invest Today

0860 225 786 | [email protected]

Think Tomorrow.
Think Tax-Free.

Page last updated: 2022-01-19