When not to use a tax-free savings account

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Cape Town - While Tax-Free Savings and Investment Accounts (TFSAs) do offer novel benefits, as with any other investment vehicle they are designed for a specific purpose and should not be viewed as a one-size-fits-all solution, according to Paul Leonard (CFP®), regional head of Citadel.  

In terms of a TFSA, you are entitled to invest up to R30 000 per year and your contributions are capped at a lifetime limit of R500 000. This will be reached in just under 17 years if you invest the maximum of R30 000 per year.

Leonard puts it in perspective:

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