FNB Share saver (Tax Free)

zerocool2009

zerocool2009

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Hi guys,

Yesterday I got an email from FNB where they said I contributed more than the maximum allowed to my tax free account.

According to the rules, you can only transfer R30 000 to the account.

From there you can buy more shares with the dividends that pays out.

Anyone in the same boat where you contributed R30 000 and you bought dividends with the paid outs.

I cant understand where I broke the rule. I emailed FNB ... awaiting their response
 
I did, but not on FNB. No issues (but then again I've been making a loss :mad: )
 
Hamster said:
I did, but not on FNB. No issues (but then again I've been making a loss :mad: )
Click to expand...

With the JSE doing nothing I assume everyone who started a TFSA is in the red.

I am more worried how they say I broke rules.

I did all my homework before the time and FNB said I can buy more shares with the dividends that are paid out. The rule is, don't move more money into the account than what I am allowed to.
 
Do you mean the dividends were reinvested? Most places reinvested them automatically.

Doesn't FNB do that? If they pay out the dividends in your normal account and you then buy more in the TFSA from your normal account I can see where the issue occurs.

As to people being in red, thats just if you went local, you should definitely be in the green if you went foreign or half local and half foreign like I will do. And that's where FNB fails, its all local.
 
supersunbird said:
Do you mean the dividends were reinvested? Most places reinvested them automatically.

Doesn't FNB do that? If they pay out the dividends in your normal account and you then buy more in the TFSA from your normal account I can see where the issue occurs.

As to people being in red, thats just if you went local, you should definitely be in the green if you went foreign or half local and half foreign like I will do. And that's where FNB fails, its all local.
Click to expand...

They don't reinvest it.
I read now the sars rules again. I cant see how contribute is buying.

This is what FNB said before I asked can I buy more shares with the dividends paid out :

"Please note that when you transfer funds into your Tax Free Share Saver account this is deemed as a contribution which is the R30 000.00

Any dividend received from the shares held is not classified as a contribution.

In this case you had purchased additional shares using the dividends, which means that you have not over contributed.
"
 
supersunbird said:
Do you mean the dividends were reinvested? Most places reinvested them automatically.

Doesn't FNB do that? If they pay out the dividends in your normal account and you then buy more in the TFSA from your normal account I can see where the issue occurs.

As to people being in red, thats just if you went local, you should definitely be in the green if you went foreign or half local and half foreign like I will do. And that's where FNB fails, its all local.
Click to expand...

True what you are saying about FNB which is local. The share saver account is linked to FNB/RMB shares
 
supersunbird said:
Do you mean the dividends were reinvested? Most places reinvested them automatically.

Doesn't FNB do that? If they pay out the dividends in your normal account and you then buy more in the TFSA from your normal account I can see where the issue occurs.

As to people being in red, thats just if you went local, you should definitely be in the green if you went foreign or half local and half foreign like I will do. And that's where FNB fails, its all local.
Click to expand...

FNB pays out to the cash facility of the investment account. Never seen an option to auto reinvest on the Share Saver. "Special" ETFs like MAPPSG has the auto reinvest functionality built into it though.

So if what he is saying is true then there is a bug on FNB's side. But other's would've complained about this already because the RMBT40 + RMBMID's dividends get paid out quarterly. So the "excessive" deposit would most likely have surfaced by now.

OP, you didn't deposit your second round of R30k already did you? Total deposits is only R30k and not R60k?
 
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zerocool2009 said:
They don't reinvest it.
I read now the sars rules again. I cant see how contribute is buying.

This is what FNB said before I asked can I buy more shares with the dividends paid out :

"Please note that when you transfer funds into your Tax Free Share Saver account this is deemed as a contribution which is the R30 000.00

Any dividend received from the shares held is not classified as a contribution.

In this case you had purchased additional shares using the dividends, which means that you have not over contributed.
"
Click to expand...

Where do the dividends end up? Inside the TFSA wrapper as cash or somewhere else?
 
Hamster said:
FNB pays out to the cash facility of the investment account. Never seen an option to auto reinvest on the Share Saver. "Special" ETFs like MAPPSG has the auto reinvest functionality built into it though.

So if what he is saying is true then there is a bug on FNB's side. But other's would've complained about this already because the RMBT40 + RMBMID's dividends get paid out quarterly. So the "excessive" deposit would most likely have surfaced by now.

OP, you didn't deposit your second round of R30k already did you? Total deposits is only R30k and not R60k?
Click to expand...

Only R30K for the current financial year
 
I see why FNB is moaning. My spending is more than R30 000. But how is spending and contributing seen as the same thing.

Anyway, hope to hear from FNB soon as this is :sick:
 
zerocool2009 said:
With the JSE doing nothing I assume everyone who started a TFSA is in the red.

I am more worried how they say I broke rules.

I did all my homework before the time and FNB said I can buy more shares with the dividends that are paid out. The rule is, don't move more money into the account than what I am allowed to.
Click to expand...

You're allowed a max of R30 000 in a fiscal year (which I believe is March - Feb, but I might be wrong). If you've contributed money into the account from other accounts / sources in excess of that amount within the fiscal year you'll be charged tax of 41% on the excess contribution by SARS. Interest / dividents etc don't count against the R30 000, only direct contributions into the account.
 
halfmoonforever said:
little off topic, how much dividends can one expect for a 30k investment?
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Depends on what shares you own. Property shares for example pay out a lot more dividends, DBXWD only trace amounts.

The FNB Share Saver by my calulcations will give you roughly 604 shares for RMBMID and RMBT40 each which should total to roughly R820 for the year (using the last dividend payout values).

Compare that to R30k worth of STPROP shares which would've given you closer to R1430


Disclaimer: very very crude calculations with a lot of assumptions
 
halfmoonforever said:
little off topic, how much dividends can one expect for a 30k investment?
Click to expand...

It will obviously depends on the funds invested in and if fully invested from the start date or phased in with monthly payment.

Here is a real world example dividend payouts of 3 different funds that are not in TFSAs but in a RA, not phased in:

Coronation Top 20 Fund (around R60 000 invested):
Apr 2015 - R506.44
Oct 2015 - R895.79
Total - R1402.23

Marriott Dividend Growth Fund (around R60 000 invested):
Apr 2015 - R509.26
Jul 2015 - R519.72
Oct 2015 - R465.89
Jan 2016 - R472.76
Total - R1967.63

Stanlib Property Income Fund (around R40 000 invested):
Apr 2015 - R723.52
Jul 2015 - R343.53
Oct 2015 - R495.93
Jan 2016 - R434.51
Total - R1997.49
 
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sjm said:
You're allowed a max of R30 000 in a fiscal year (which I believe is March - Feb, but I might be wrong). If you've contributed money into the account from other accounts / sources in excess of that amount within the fiscal year you'll be charged tax of 41% on the excess contribution by SARS. Interest / dividents etc don't count against the R30 000, only direct contributions into the account.
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I contributed R30K since March 2015 till 29 Feb 2016

From there dividends where paid out where I bought more shares.

In my eyes the dividends buys isn't seen as contributions (or how am I wrong).
 
FNB see's the buying of shares as contributions.

My portfolio spending is above R30K (That is why FNB is worried I think)

But I contributed R30K, and not one sent more.

FNB confirmed I can buy more shares with the dividends.
 
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You can't buy individual shares within a TFSA, what are you buying? ETFs?
 
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