16/09/2026
Most people understand the basic attraction of a Tax-Free Savings Account.
You invest money, and the investment returns within the account are exempt from income tax, dividends tax and capital gains tax. For the current tax year, South Africans can contribute up to R46,000 per year, subject to the R500,000 lifetime contribution limit.
But there is something I think investors should understand particularly well:
The Tax-Free Savings Account itself isn’t what creates the investment growth. It provides the tax-efficient structure.
What you choose to invest in inside that structure is what determines how your money participates in investment markets.
So what could actually sit inside a Tax-Free Savings Account?
This is where investment advice and portfolio construction become important.
For suitable long-term investors, one of the model portfolios we use at Consult is the Consult Select 7 Plus Tax-Free Savings Account Portfolio. This isn’t simply one fund managed by one investment manager.
It uses a multi-manager approach, bringing together different investment managers, asset classes and investment strategies within one professionally constructed portfolio.
As at 31 August 2026, the portfolio was approximately:
58% invested locally 🇿🇦
42% invested globally 🌍
Within that are investments across South African and global equities, property, bonds and other asset classes, with a range of underlying professional investment managers.
Why would we use a model portfolio?
Because long-term investing isn’t about trying to guess which single fund manager, country or asset class will perform best next year.
💪🏽Different investment managers have different investment philosophies.
💪🏽Different asset classes perform differently through different market cycles.
South African markets won’t always behave like global markets.
A model portfolio allows these different components to be combined into one diversified investment strategy.
And importantly, the portfolio can then be monitored and managed as a whole.
In this particular portfolio, the objective is growth
The Consult Select 7 Plus Tax-Free Savings Account Portfolio is classified as moderately aggressive and is intended for investors with a longer investment horizon.
Its benchmark is CPI + 6% over rolling seven-year periods, and the portfolio is specifically positioned as a high-growth investment strategy.
That seven-year timeframe is important.
Growth investing doesn’t mean your investment moves upwards every month or every year.
Markets fluctuate. There will be good periods and difficult periods. A higher-growth strategy means accepting that volatility in pursuit of longer-term growth, and capital is not guaranteed.
And this is where the Tax-Free Savings Account becomes interesting
If you’re investing for many years, you’re not only thinking about what your original contributions could become.
You’re thinking about the growth on those contributions, and potentially the growth on the growth that came before it.
Inside a Tax-Free Savings Account, investment returns are exempt from income tax, dividends tax and capital gains tax. Importantly, investment growth itself does not count towards the R500,000 lifetime contribution limit.
So your account value can ultimately grow beyond R500,000 without breaching the lifetime limit. It is the contributions that are limited, not the value your investment may eventually reach.
That is why I believe a Tax-Free Savings Account deserves to be thought of as much more than simply a “savings account”.
For the right investor, it can form part of a long-term wealth creation strategy.
The question I want investors to start asking
Don’t only ask:
“Do I have a Tax-Free Savings Account?”
Ask:
“What is my money actually invested in?”
“How diversified is it?”
“How much local and global exposure do I have?”
“What level of risk am I taking?”
And most importantly:
“Does the investment strategy inside my Tax-Free Savings Account match what I’m trying to achieve?”
Because the tax benefit is incredibly valuable.
But the tax benefit creates the opportunity. The investment strategy does the work.
