Compare interest rates for TFSA cash deposits

Colin Anthony
By Colin Anthony October 23, 2017 12:53

Story Highlights

  • Compare TFSA cash deposit interest rates
  • banks tax-free rates
  • Absa
  • Capitec
  • FNB
  • Nedbank
  • Standard Bank
  • Investec
  • lump sum
  • fees
  • access to funds

Related Articles

12583704_xl

The big banks have all now moved to offer tax-free savings accounts (TFSAs) that are based on deposits – either fixed or call. The interest rates on offer by banks for cash deposits in TFSAs are surprisingly diverse, with Nedbank offering the highest rates for small sums while African Bank offers the best rate of 8.67% for a 12-month fixed deposit starting from R500.

Absa’s rates are the least competitive, while Capitec competes strongly across all amounts, starting at 5.22% for minimal outlays – its minimum required amount is only R1 – but its TFSA is a 12-month fixed term. Like Investec’s, there is a R300 charge for early withdrawals, but money is then available immediately while Investec’s product requires seven days’ notice.

Absa and Standard offer instant access to the cash deposits – at a branch though, not at ATMs – while Nedbank requires 24 hours’ notice and FNB requires seven days.

Investec, which does not play in the mass market space for which cash TFSAs are ideal, has come in with a simple offering more suited to its higher-income target market: 8.06% interest a year on a minimum deposit of R30 000 (the maximum tax-free amount allowed each year is now R33 000) on a 12-month term.

 

Interest rates on cash TFSAs (per year)

R0-R249 R250 – R1 000 R1 000 – R4 999 R5 000 – R9 999 R10 000 – R14 999 R15 000 – R19 999 R20 000 – R24 999 R25 000 – R30 000 
Absa 3.75% 3.75% 3.75% 3.75% 3.75% 5.75% 5.75% 5.75%
African Bank NA 8.67% 8.67% 8.67% 8.67% 8.67% 8.67% 8.67%
Capitec* 5.22% 5.22% 5.22% 5.22% 6.96% 6.96% 6.96% 7.23%
FNB NA NA 5.90% 5.90% 6.00% 6.00% 6.75% 6.75%
Nedbank 6.00% 6.00% 6.00% 6.00% 6.00% 6.00% 6.50% 6.50%
Standard NA 5.90% 5.90% 6.05% 6.20% 6.20% 6.35% 6.35%
Investec* NA NA NA NA NA NA NA 8.06%**

 

*12-month term  **R30 000 minimum                                                           Source: Intellidex Research

 

None of the banks charges fees to open or manage TFSA accounts for existing customers and minimum amounts required are generally low. FNB and Absa require a minimum lump sum of R1 000, but no further investment is required.

Standard Bank and Nedbank have structured their TFSAs to target recurring investments with low monthly sums, with clients ideally instituting a monthly stop order from their regular accounts. Standard requires a minimum of R250 a month and Nedbank requires only R50 a month.

 

 Bank Min lump
sum
Min monthly
amount
Term Fees  Access to funds
Absa R1 000 0 Any 0 Instant
African Bank R500 0 12 Months 0 Up to 10% for early access, or else 12 months
Capitec 0 0 12-24 months 0 R300 for early access, or else 12 months
FNB R1 000 0 12 months 0 7 days
Nedbank R50 R50 Any 0 24 hours
Standard R250 R250 Any 0 Instant, with cheque fee on withdrawal
Investec R30 000 R0 12 months 0 R300 for seven days’ notice, or else 12 months
Colin Anthony
By Colin Anthony October 23, 2017 12:53
Researching Capital Markets & Financial Services

All ABOUT ETFs

Researching Capital Markets & Financial Services