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Investec tax-free fixed deposit account review 2022

Published by
Lethabo Ntsoane

Investec is known for providing high-quality financial solutions, and the Tax-Free Deposit Account is no exception. The Tax-Free Fixed Deposit Account allows account holders to save money while still earning interest

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The interest rate on the Investec Tax-Free Fixed Deposit Account is fixed until the account matures. This is unusual for tax-free savings accounts because tax-free savings accounts earn interest by investing in mutual funds. Investec, on the other hand, guarantees the account’s interest rate.

The Investec Tax-Free Fixed Deposit Account is special in that it has a withdrawal limit. The money you put into the Investec Tax-Free Fixed Deposit Account is locked in for a year. However, there are fees associated with withdrawals from the account.

The Investec Tax-Free Fixed Deposit Account complies with SARS’s requirements for a tax-free savings account. As a result, there is no taxation on the contributions to the account, whether it be income tax, dividend tax, or capital gains tax.

Below is further information on the Investec Tax-Free Fixed Deposit Account.

Investec Tax-Free Fixed Deposit Account Summary

A minimum initial investment of R30,000.00 is required for the Investec Tax-Free Fixed Deposit Account. The Investec Tax-Free Fixed Deposit Account allows you to deposit a maximum of R36,000.00 each year. At the account’s maturity date, you can access your contributions.

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The R30,000.00 to R36,000.00 per tax year investment and interest earned can only be retrieved at maturity, therefore the investment is locked for a period of 12 months. The interest collected on the account can be either capitalized to earn more interest or paid to the account holder monthly.

The interest rate on the Investec Tax-Free Fixed Deposit Account is fixed for the investment period of 12 months. Since interest on the account is compounded monthly, the compounding effect will yield the account holder extra interest if interest is capitalised.

On the Investec Tax-Free Fixed Deposit Account, withdrawals are permitted on the maturity date without penalty. Investec has set a minimum withdrawal amount of R5,000.00 for the account. If the account holder wishes to make another deposit in the following year, Investec must be notified.

If Investec is not notified of a withdrawal, the money in the account will be immediately reinvested in another Tax-Free Fixed Deposit. This will be done for another fixed deposit at the current market rate.

Unlike traditional fixed deposit accounts, this account does not charge an administrative or promotion fee. Since there are no taxes to pay on this account, all earnings are due to the account holder.

How the Investec Tax-Free Fixed Deposit Account Work

 You can apply for the Investec Tax-Free Fixed Deposit Account on the Investec website. FICA documentation will be required when submitting an application. The account offers guaranteed investment returns that are tax-free, as well as a guaranteed capital investment.

To begin, a deposit must be made into the account, and an interest rate will be offered to the account. A minimum investment of R30,000.00 or any amount over the minimum investment but less than R36,000.00 is required.

SARS’ Tax-Free Savings Account guidelines apply to the Investec Tax-Free Fixed Deposit Account. The account stipulates that annual contributions cannot exceed R36,000.00. Furthermore, the account’s lifetime contributions cannot exceed R500,000.00.

Contributions to the Investec Tax-Free Fixed Deposit Account are subject to a 12-month fixed deposit period. Furthermore, the account’s interest rate is fixed. The interest collected can be capitalized or deposited into the account holder’s account on a monthly basis.

The account includes the possibility to make additional investments from year to year. The maximum amount that can be invested in a deposit is R36,000.00.

Advantages of the Investec Tax-Free Fixed Deposit Account

  • The account’s interest is assured and is not affected by market fluctuations.
  • The account gives you access to your money.
  • There are no administrative costs associated with this account.
  • Every year, Investec will reinvest the money in the account to guarantee that it continues to earn income.
  • Year after year, more deposits can be made to the account to boost the account’s savings.
  • The account does not have any promotional costs.
  • The account application process is simple and can be completed online.
  • This account’s earnings are not subject to taxation.

Disadvantages of the Investec Tax-Free Fixed Deposit Account

  • A penalty fee is charged if funds are accessed before maturity.
  • The minimum maturity withdrawal is quite large, and some persons may prefer to withdraw less than R5,000.00.
  • The R30,000.00 minimum deposit into the account is somewhat hefty.
  • There are no investment funds to pick from because the account is solely managed by Investec.
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Conclusion

The Investec Tax-Free Fixed Deposit Account is one approach to saving money for the long or short term, depending on the reason for saving. The account can be used to save for retirement and withdraw savings at or after retirement age because the interest and capital are guaranteed.

The interest rate on the Investec Tax-Free Fixed Deposit Account is fixed until the account matures. This is unusual for tax-free savings accounts because tax-free savings accounts earn interest by investing in mutual funds. Investec, on the other hand, guarantees the account’s interest rate.

Investec tax-free fixed deposit account review 2022
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Lethabo Ntsoane

Lethabo Ntsoane holds a Bachelors Degree in Accounting from the University of South Africa. He is a Financial Product commentator at Rateweb. He is an expect financial product analyst with years of experience in reviewing products and offering commentary. Lethabo majors in financial news, reviews and financial tips. He can be contacted at lethabo@rateweb.co.za

Published by
Lethabo Ntsoane
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