Not Financial Advice SA
The cost of small differences

One percent is not small.

Start with R500,000 in a South African tax-free investment and compare what different returns and fees can do over time. The figures below are illustrations, not forecasts or personal advice. They are designed to make better questions visible: what is the investment earning, what does it cost, and what are you receiving for that cost?

Change the assumptions

All returns are annual and before the extra fee. No further contributions or withdrawals are included.

10 years30 years40 years
0%1.0%3%

Illustrative gross returns

What the assumptions produce

Best growth result versus savings
R0
Largest loss to the selected fee
R0
Where the TFSA is invested Gross return Value before extra fee Value after extra fee Lost to fee drag

These are smooth, nominal compound-growth illustrations before inflation. Real returns arrive unevenly and can be negative for long periods. Offshore index outcomes for a South African investor are also affected by the rand, while actual products add tracking differences and fund or platform charges. The fee control is deducted from each annual return to show the combined effect of fees and lost compounding.

Return matters

A TFSA is a tax wrapper, not an investment. Cash, a local equity index and a global equity index can all sit inside the wrapper, but they carry very different risk and long-term growth potential.

Fees compound too

An annual fee does more than remove money once. Every rand paid in fees also loses all the future growth it could have earned, which is why the gap widens over long periods.

Compare like with like

Ask for the full cost: advice, platform, administration and fund charges. Then compare net returns, risk, diversification and access rather than choosing on one number alone.

Why the example starts at R500,000

SARS says tax-free investments began on 1 March 2015 and currently have a R500,000 lifetime contribution limit. Its contribution schedule shows a person who used every annual allowance reaching that limit during the 2029 tax year. This page therefore starts at the moment R500,000 has been contributed and asks what happens next; it does not claim that R500,000 could have been invested in a TFSA from 2015.