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The Investec offices in Sandton, Johannesburg. Picture: GALLO IMAGES/CHARLES GALLO
The Investec offices in Sandton, Johannesburg. Picture: GALLO IMAGES/CHARLES GALLO

Investec, the niche private banking and wealth management group, has informed its clients that it is winding down its 12-month tax-free fixed-deposit account at the end of the year, nearly 10 years after its launch.

The specialist bank said in a notice to its clients it was doing away with the product in a move that indicates the offering is no longer fit for purpose for its clients.

“As Investec Personal Cash Investments (PCI), we regularly review our savings products, factoring in our clients’ needs, the financial environment and our strategic objectives. After careful consideration, we have made the decision to close the Investec cash investments 12-month tax-free fixed-deposit account,” reads the notice.

“The closure of this account will happen on December 31 2024. This notification period will ensure you have enough time to consider alternate product providers and tax-free products.”

Investec in 2015 joined the rush to offer tax-free savings products after the National Treasury opened the door for such products to be taken to market as part of its drive to improve household savings for all South Africans.

Tax-free investment accounts cannot be used as transactional accounts, and debit or stop orders and ATM transactions are not possible from these accounts.

In alignment with National Treasury’s policy on income tax, Investec’s tax-free deposit allowed its clients to invest in a product the returns of which will not attract tax.

Contributions are limited to R36,000 annually and a lifetime limit of R500,000 for the tax exemption to apply.

PCI “reviews its products on an annual basis to ensure that they remain relevant in an ever-changing financial environment and that increasing demand for accounts that are faster and simpler to use are met with sufficient attention and servicing by our teams”, a spokesperson said.

“These reviews are done consistently to ensure that all products align with Investec’s business objectives while meeting our clients’ needs. It is on this basis that we have decided to close this product.

“We will continue to offer other call, notice and fixed-deposit accounts. Investec continues to offer other tax-free solutions for private bank clients.”

The lender has traditionally not sought to be all things to all people but to build well-defined, value-adding businesses focused on serving the needs of select market niches where it can compete effectively and build scale and relevance.

As the company has identified the acquisition of private clients as a key growth area, it has expanded its footprint within key urban and other areas to further attract potential private clients. Its target market in SA is high net worth individuals, high-income professionals, emerging and established entrepreneurs, young professionals across multiple disciplines, charities and trusts, financial advisers and intermediaries.

Khumalok@businesslive.co.za

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