Anyone over the age of 18 can open an Alexander Forbes Tax-Free Savings Account. However, individuals under the age of 18 can open an account with the assistance of a guardian. Individuals can open a TFS account to save money and earn interest on their savings.
Alexander Forbes invests the money saved into a number of funds that are administered by Alexander Forbes. Since their benchmark is used by several of Allan Gray TFSA’s funds, these funds are known to produce positive returns. As a result, the Alexander Forbes Tax-Free Savings Account is likely to outperform the market.
The Alexander Forbes Tax-Free Savings Account is free of all taxes, including capital gains, dividends, and income. Furthermore, there are no registration, administration, or withdrawal fees for account holders. However, there is an investment charge that is determined by the fund in which the savings are placed.
Online applications are available for the Alexander Forbes Tax-Free Savings Account. After the account has been approved, the applicant will be given access to the account. FICA documentation may be required depending on the amount of money invested.
The Alexander Forbes Tax-Free Savings Account is a fee-free savings account that invests in some of the best-performing investment products. Before you open the Alexander Forbes Tax Free Savings Account, read the material below to get a better understanding of the account.
The Alexander Forbes Tax-Free Savings Account is a TFSA from Alexander Forbes that requires a minimum monthly investment of R250.00. The maximum monthly contribution to the account is R2750.00. The Alexander Forbes Tax-Free Savings Account, like any other tax-free savings, account in South Africa, has a yearly cap of R36,000.00.
SARS will impose a penalty if a person exceeds the annual contribution limit of R36,000.00. All contributions over R36,000.00 per tax year will be subject to a 40% tax. As a result, one should make sure that their contributions to the Alexander Forbes Tax-Free Savings Account do not exceed the maximum allowed for the year.
When investing in the Alexander Forbes Tax-Free Savings Account, a lifetime contribution of R500,000.00 must not be exceeded. However, if an account holder has additional open tax-free savings accounts with other financial institutions, the total of all active accounts must not exceed the year and lifetime contributions.
Only investment fees apply to the Alexander Forbes Tax-Free Savings Account. These fees vary depending on the investment fund one wants to put their money into. For Alexander Forbes clients, the following costs apply:
| # | Alexander Forbes Fund name | Fee percentage % |
| 1 | Institutional Equity Unit Trust Class T | 1.00% |
| 2 | Real Return Focus Unit Trust Class T | 1.20% |
| 3 | Superior Yield Unit Trust Class T | 0.40% |
| 4 | Aggressive Passive Unit Trust Class T | 0.50% |
| 5 | Conservative Passive Unit Trust Class T | 0.50% |
| 6 | Property Equity Unit Trust Class T | 1.20% |
To apply for an Alexander Forbes TFSA, go to the Alexander Forbes website and fill out an application. FICA (Financial Intelligence Centre Act) documentation will be required when submitting an application. These documents must be uploaded when filling out the online application.
Alexander Forbes will process the application and notify the applicant of the decision after it has been submitted. After that, an Alexander Forbes Tax-Free Savings Account will be activated, and a contribution will be required.
Monthly contributions range from R250.00 to R2,750.00 per month. Contributions to a tax-free savings account can be paid by debit order or electronic funds transfer (EFT). Contributions are accepted until the lifetime contribution threshold is met.
The applicant must decide which investment fund to put their money into. There are six investment funds from which to choose, and one should familiarize themselves with them. The investment’s dividends are capitalized and used to grow the savings.
There are no costs associated with withdrawals from the Alexander Forbes TFSA. Furthermore, funds from the Alexander Forbes Tax-Free Savings Account can be transferred to another institution’s TFSA without penalty.
The minimum contribution to the TFSA of R250.00 is affordable.
There are many investment funds to choose from when making an investment.
There is no administration fee charged.
Money invested is easily available and can be accessed within 7 working days of placing a withdrawal.
Extra savings can be made of up to R2,750.00 per month.
An application can be done online.
Funds from the Alexander Forbes Tax Free Savings Account can be transferred to another provider’s TFSA.
There is no performance fee charged on the account.
There is no tax charged on the account; the interest earned goes directly to the account holder.
The TFSA is only available to South African citizens who reside in South Africa and don’t have tax residency in any other country.
Failure to meet the contribution rules means SARS charges a 40% tax.
Conclusion
When compared to TFSAs in South Africa, the Alexander Forbes Tax-Free Savings Account has few costs. The lack of a withdrawal fee, a promotion fee, or an administration fee Furthermore, the account is tax-free, which is a huge benefit because the account will be able to grow quickly.
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