TFSA for Beginners: Your First Steps

Why Should You Care About a TFSA?

Imagine keeping every cent your investments earn. No tax on dividends. No tax on growth. No tax when you cash out. That's exactly what a TFSA offers.

In a regular investment account, the government takes a slice of your profits. With a TFSA, you keep everything.

What is it? A special account where your money grows without tax.

How much can you put in? Up to R36,000 per year, with a lifetime maximum of R500,000.

What can you invest in? ETFs, unit trusts, savings bonds, and more.

When can you withdraw? Anytime! There are no lock-in periods.

You don't need to invest the full R36,000 at once. Here's a simple approach:

Start with whatever you can afford. Even R500 per month is a great beginning.

For beginners, we recommend keeping it simple:

Option 1: One-Fund Approach Pick a single diversified ETF like:

Option 2: Two-Fund Approach Split between local and international:

Choose a provider: Popular options include EasyEquities, Satrix, Allan Gray, or 10X
Create an account: Fill in the online application form
Verify your identity: Upload your ID and proof of address
Transfer money: Link your bank account and make your first deposit
Buy your first ETF: Search for the ETF code and place your order

The whole process takes about 15-30 minutes.

Can I lose money? Yes, investments can go up and down. But historically, the stock market has grown over the long term.

What if I need the money? You can withdraw anytime, but remember: withdrawn amounts still count against your lifetime limit.

Can I have multiple TFSAs? Yes, but your total contributions across all accounts cannot exceed the limits.

What about fees? Look for ETFs with low Total Expense Ratios (TER). Aim for under 0.5%.

The hardest part is starting. Once your automatic investments are running, you can sit back and watch your wealth grow tax-free.