Make Tax-Free Savings Work For You In 2024 Amidst Ongoing Economic Challenges

07 February 2024

As South Africa navigates through ongoing economic challenges, Al Baraka Bank, represented by its General Manager: Retail and Wealth, Mr Nasir Seedat, reiterates the importance of financial security and the effective utilization of tax-free savings.

"Given the persistent economic challenges, now is the opportune moment to prioritize savings and mitigate against financial uncertainties," Mr Seedat emphasizes. Al Baraka Bank continues to support the government's initiatives to enhance the savings culture in South Africa through tax-free investments—a vehicle introduced several years ago.

With the imminent tax year-end, Mr Seedat encourages individuals to leverage tax-free savings mechanisms. "Optimizing savings amidst uncertainties, job concerns, and ongoing salary reductions is crucial for creating financial security and an improved sense of well-being," he notes.

Tax-free investment offerings empower individuals by exempting them from paying tax on earnings, regardless of the investment period. Investors can contribute up to R36,000 per tax year, with a lifetime limit of R500,000. However, exceeding these limits may result in penalties.

Mr Seedat underscores the historical poor levels of saving in the country, exacerbated by economic challenges. "It is no longer viable to 'live-for-today.' The prolonged nature of the economic challenges could lead to increased debt or, worse, financial ruin for those without the back-up of savings," he warns.

Expressing the commitment of Al Baraka Bank to contribute to societal mindset revision, Mr Seedat says, "We actively encourage people to devise, implement, and maintain a sustained savings program, setting aside funds for use when facing challenges."

Opening a tax-free savings account is accessible, requiring only a minimum initial deposit of R1,000, with a subsequent affordable top-up deposit level of R250. "This method offers an affordable fast-track to excellent tax-free savings, contributing to a safer financial future and effective wealth growth amidst prevailing uncertainties," Mr Seedat asserts.

He also highlights the role of tax-free savings in encouraging young people to adopt a savings culture from an early age, making it a sustainable habit and promoting self-discipline.

In conclusion, Mr Seedat emphasizes the need for financial responsibility, stating, "The bottom line is that we all need to think about becoming more financially responsible, and now is the perfect time to think tax-free."



Issued By:

Media Enquiries, Contact:

Mr Nasir Seedat, General Manager: Retail and Wealth

Mobile:082 930 6666