There has never been a better time to be a saver in South Africa! From 1 March 2026, the government increased the amount you can invest in a tax-free savings (TFSA) or Tax-Free Fixed Deposit account from R36 000 to R46 000 a year- and what’s great about this investment is, every rand of interest you earn, is yours to keep. No income tax. No capital gains tax. Just your money, growing for you.
If you already have a TFSA, this is your signal to do more with it. If you don’t have one yet, consider this your introduction to one of the smartest savings tools available to South Africans – and now is the perfect moment to start.
Here’s why:
The new limit is your chance to grow faster
The higher annual TFSA contribution limit means that, if you can contribute the full amount every year, you can reach the R500 000 lifetime limit in around 11 years (three years sooner than before). That unlocks more years for all that money you’ve saved (and already earned interest on) to grow, tax free.
“Time is your ally when it comes to tax-free savings” explains Sisandile Nkatu, Head of Retail Investments at Nedbank. “The sooner you start, the sooner your money starts working for you – without the taxman taking a share.”
You don’t need R46 000 to start
The most common reason people don’t open a TFSA is that they think they can’t afford to save the full allowed amount every year. “You don’t need to be able to save the full R46 000 per year, you can start with Just R250 “Nkatu explains. “Every rand you put in grows tax-free, compounding year on year.” So, don’t wait – start now, and try to increase contributions when you can.”
A TFSA is not a savings account you dip into
This is perhaps the biggest misunderstanding about TFSAs. You can withdraw money at any time, but you shouldn’t. Whatever you take out, permanently reduces your lifetime contribution limit. That money can never go back in! So, if you withdraw R20 000 for a holiday, you’ve permanently lost R20 000 of tax-free money to grow. “Think of your TFSA as a long-term wealth-building solution, not an emergency fund,” explains Nkatu. “Every rand you leave inside it is a rand that keeps working for you, tax-free.”
Open one for your child – it may be the best gift you ever give them
Every South African – minor children – can have their own TFSA. If you want to invest for a child, always open the account in their name, so their contributions count against their lifetime limit, not yours. Think about this: if you start investing R1 000 a month at 7% interest when your child is born, their TFSA will have R510 000 in it by the time they turn 20 (you will only have put in R240 000). If they leave that money invested, in another 20 years’ time, it will grow to around R2 million – without contributing another cent. That’s a big deposit on a home, seed capital for a business, or the foundation for long-term wealth building.
Use your Nedbank Greenbacks to top up your TFSA
If you’re already banking with Nedbank, you’ve got a great way to boost your tax-free savings contributions. You can redeem your Greenbacks rewards directly into your Nedbank Tax-Free Savings Account via the Money app or Online Banking. It’s an effortless way to grow your tax-free savings without spending anything extra.
Remember that it’s never too early, too late, or too little
“Whether you’re 12 and have a lemonade stand, 25 and just starting your career, 40 and feeling behind, or approaching retirement, starting a tax-free saving account is always worth it,” Nkatu emphasises. “The worst financial decision is the one you keep putting off.”
