Withdrawing from your TFSA

How TFSA withdrawals work

Withdrawing from your Tax-Free Savings Account works differently than other Fynbos accounts. Because your TFSA holds investments, you need to sell your holdings first, and the proceeds are paid directly to your bank account.

• Sell to withdraw: Your money is invested in funds, so withdrawals require selling holdings

• Direct to bank: TFSA withdrawals go straight to your bank account, not to your Cash account

• Processing time: Withdrawals typically take 2-3 business days to arrive

Important: Withdrawing from your TFSA permanently uses up your lifetime contribution allowance. You cannot re-contribute withdrawn amounts, even in future tax years. Consider this carefully before withdrawing.

Making a TFSA withdrawal

To withdraw money from your Tax-Free Savings:

1. Open your Tax-Free Savings account from the home screen

2. Tap Withdraw

3. For each holding, enter the amount you want to sell:

   • For unit trusts: Enter a rand amount (e.g., R5,000)

   • For ETFs: Enter the number of shares to sell

4. Select your bank account from the dropdown

5. Tap Review withdrawal

6. Review the withdrawal summary, including:

   • Total amount being withdrawn

   • Individual holdings being sold

   • Estimated fees (if applicable)

   • Expected arrival date

7. Check the confirmation box acknowledging the impact on your contribution limits

8. Tap Withdraw to confirm

Your sell order is now placed with the fund manager. Once settled, the funds will be paid to your bank account.

Understanding contribution limit impact

When you withdraw from your TFSA, you permanently lose that contribution space. This is a key difference from regular savings accounts.

How it works:

• South Africa allows R36,000 in TFSA contributions per tax year

• There's also a R500,000 lifetime contribution limit

• Withdrawals do not restore your contribution allowance

Example:

If you've contributed R100,000 over several years and withdraw R20,000, your lifetime contribution total remains R100,000. You cannot re-contribute that R20,000 without it counting toward your limits.

What this means for you:

• Only withdraw from your TFSA when you truly need the money

• Consider withdrawing from other accounts first if possible

• Your TFSA is best suited for long-term goals where you won't need early access

Withdrawal timeline

TFSA withdrawals take longer than regular Cash withdrawals because your holdings need to be sold first.

The app shows you the estimated arrival date before you confirm your withdrawal.

Funds on hold

Some deposits have a hold period before they can be withdrawn, even from your TFSA.

When you start a withdrawal, you'll see your available balance and any funds currently on hold displayed separately.

Alternatives to withdrawing

Before withdrawing from your TFSA, consider these alternatives:

Transfer your TFSA to Fynbos from another provider

If you have a TFSA elsewhere and want to consolidate, you can transfer it to Fynbos without impacting your contribution limits. Contact support to initiate a transfer.

Change your investment strategy

If you want to move money between different funds within your TFSA, you don't need to withdraw. Contact support to discuss changing your investment strategy.

Withdraw from other accounts first

If you have money in your Cash account, Emergency Savings, or Savings pots, consider withdrawing from there instead to preserve your TFSA contribution space.