FAQs for Tax-Free Transfers
What is a Tax-Free Transfer?
A Tax-Free transfer allows you to transfer your Tax-Free Savings Account from one financial institution into another institution without triggering contributions or withdrawals. You can do a partial transfer (transferring a portion of your tax-free funds) or a full transfer (transferring all your tax-free funds). Kindly note that funds withdrawn from an account cannot be treated as a TFS Transfer, it is imperative to follow the correct process to do a TFS Transfer.
When are transfers effective?
You may initiate a transfer into or out of a Tax-Free Savings Account from 1 March 2018.
What is a Transfer Certificate?
A Transfer Certificate is a record of information relating to the Investor and the transfer. When a Financial Institution transfers a Tax-Free Investment, they must provide you and the new Financial Institution (with which you have chosen to invest) with a Tax-Free Savings Account transfer certificate.
Can I do a Tax-Free Savings transfer online myself?
Only valid Financial Institutions will be allowed to transfer directly to another valid Financial Institution on behalf of an Investor. As an Investor, you should not action a transfer in your personal capacity by withdrawing amounts from your Tax-Free Investment savings accounts and depositing that amount into a different product provider, this will be classified as a new contribution.
What is the difference between a Transfer and a Contribution?
A contribution to a tax-free account is any amount that was deposited into your Tax-Free account(s) that did not follow the formal transfers process agreed to by industry. A transfer from or to another Financial Institution will be classified differently to contributions and withdrawals and will not affect your annual or lifetime contributions already utilised.
How is my personal information kept safe?
FNB will only share your personal information that is required to process a transfer once we have validated the information and received your permission to share with the specified Financial Institution. Any Transfer Certificate will also be encrypted when sent from FNB to the other Financial Institution and to you as the customer.
Can I transfer my Tax-Free Savings to another Financial Institution for the benefit of someone else?
No. Tax-Free transfers are only allowed between Financial Institutions for the benefit of the same individual. This means that a parent, for example, cannot transfer his/her own Tax-Free Investment to another account (at any Financial Institution) for the benefit of his/her child.
How do I transfer a minor or dependent's Tax-Free Savings funds?
The standard transfer application form has a section "Acting on behalf of the Investor" that needs to be completed by the Guardian/Person with Power of Attorney.
What documents are required to action a transfer?
An accurately completed Transfer Request form must be submitted to the relevant Tax-Free Transfers team. Visit www.fnb.co.za for more information.
Will my contributions into the account be monitored?
Contribution limits into the FNB Tax-Free Savings Account will be capped as per annual tax year and lifetime limits. You may contribute into the Tax-Free Cash Deposit, Tax-Free Unit Trusts and Tax-Free Shares Account. It is your responsibility to ensure that you stay within the limits if you hold more than one Tax Free product across institutions.
How long does it take to process a valid transfer?
A fully completed and valid transfer request will be completed within 10 business days from the date of receipt. On the Tax-Free Cash Deposit, there is a minimum notice period of 7 days applicable after an instruction to transfer has been loaded. You will be kept informed on the progress of your transfer request by a dedicated team from FNB.
Will I earn any interest during the transfers process?
For Transfers In, FNB will not pay interest on the amount being transferred, until successful completion of the transfer i.e. the funds have been paid into your Tax-Free Savings Account. For Transfers Out, FNB will not be liable for interest on the amount being transferred while it has not been successfully completed by the receiving Institution.
Who may I transfer to?
Any other valid Tax-Free Investment Financial Institution. The transfer of funds must be for the benefit of the same individual at the other institution.
Can I transfer the value of my non-Tax-Free Account to a Tax-Free Savings without having a tax impact?
No. Such a transaction will be classified as a contribution and will impact your annual and lifetime contribution limits.
Will FNB facilitate my transfer request with the new Tax-Free Savings Institution?
Yes, only after FNB has confirmed receipt of a valid and complete Tax-Free Savings transfer application form from you, the Investor.
How will I know when a Tax-Free transfer has been successful?
For Transfers In, FNB will send you a notification once the funds have been allocated to your Tax-Free Account.
For Transfers Out, FNB will notify you once the funds have left your Tax-Free Account. FNB will also email an encrypted transfer certificate once the funds have been debited from your account. The receiving institution should notify you once the funds have been received.
Can I transfer funds to FNB without having a Tax-Free Savings Account with FNB?
For a Transfer In request to be successfully processed, you will need to have an open Tax-Free Savings Account with FNB. Visit www.fnb.co.za to open an account.
How much can I transfer in or out?
Transfers In: FNB will accept any amount to be transferred in. Please note that Product Rules still apply and should your balance in the account after the Transfer In, be less than the minimum account opening balance, you will not earn any interest.
Transfers Out: FNB will transfer out a minimum of R500. Please note that Product Rules still apply and should your balance in the account be less than the minimum account opening balance after the Transfer Out request have been received, FNB will first contact you to amend the amount based on product rules.
What will it cost me to do a transfer?
As an FNB client, you will not incur any costs for transfers IN or OUT. Please refer to the FNB Pricing Guide for the latest pricing on all products.
How will fees be deducted upon transfer, if any?
In accordance with Regulation, fees relating to your Tax-Free Savings account will be deducted from the same account and may not be recovered or diverted to any other FNB account.
Are there any tax implications for a Tax-Free Savings transfer?
There will be no tax implications for a valid Tax-Free Investment transfer between valid Tax-Free Investment institutions.
Will the Tax-Free Transfer affect my annual and lifetime contribution limit?
No, unless you withdraw the funds and deposit them into another Institution in your personal capacity and fail to use the prescribed transfer channels.
Is there a freeze period for applying for transfers during a financial tax year?
Regulation prescribes that a Financial Institution must refuse to transfer any amount in respect of a Tax-Free Savings during the last 10 business days of a tax year. A tax year runs from the first day in March to the last day of February the following year.
Can FNB reject a transfer OUT?
Full Transfer request: FNB may not reject a full transfer OUT but must adhere to a regulatory freeze period.
Partial Transfer request: FNB may reject a partial transfer OUT where the remaining funds in the account do not meet the product rules to remain as an active product.
Can a Financial Institution reject a transfer IN?
Regulation permits a Financial Institution to refuse to accept transfers IN. FNB will communicate with you if any such reason arises.
How many transfers can I do?
Regulation specifies that an Institution may reserve the right to limit the number of transfers to 2 in a tax year.
What information will be provided to the receiving Tax-Free Savings Institution?
When you do a transfer from your Tax-Free Savings Account your current FNB contribution limits will be presented on the transfer certificate and the receiving Tax-Free Savings Institution will incorporate those limits in their system to monitor any future contributions made to them.
