What are SSFX and SSF? What are the differences? What are the investment conditions? What type of workers are they suitable for? Let’s find out.
Super Saving Fund (SSF)
After receiving approval from the Cabinet meeting on December 3, 2019, this new fund called “SSF” will be a new one that will be used to reduce taxes instead of the original LTF or Long Term Equity Fund (LTF) that expired in 2019.
This “SSF” fund will be another option for tax reduction from 2020 onwards.
But what is the “SSF” fund? What does it invest in? How do you get tax deductions? Are the conditions very different from the original? Let’s find out the answers now.
SSF Fund or Mutual Fund for Savings
It is a mutual fund established to promote long-term savings, with a holding period of at least 10 years from the date of purchase [different from the original LTF, which required holding for at least 7 calendar years].
It is a mutual fund that has investment formats in all types of securities, whether it is bonds, stocks, mutual funds, or others, which is an investment that is flexible and has many more options [different from the original LTF that focused on investing only in Thai stocks]
What are the tax benefit conditions of the SSF Fund?
- Give individuals the right to purchase for income tax deduction, up to 30% of income, but not more than 200,000 baht.
With an additional condition that if investing in the SSF fund, when combined with other retirement tax-deductible investments, such as RMF, provident funds, government pension funds, private school welfare funds, national savings funds, and pension insurance premiums, the total must not exceed 500,000 baht.
This is different from the original LTF fund, which can be purchased for no more than 15% of the total annual income, but not more than 500,000 baht (not including other retirement tax reduction funds).
- SSF funds do not specify a minimum purchase amount and do not specify conditions for continuous purchase, meaning that we can purchase as little as we want or purchase only in the year we want.
However, it can be sold back without paying tax only if the holding conditions of the SSF Fund are met, which is to hold investment units for no less than 10 years from the date of purchase.
Summary for SSF Fund
Advantages: Suitable for working-age people. It is another option for long-term savings for retirement. It is more flexible because you can choose to invest in many types of securities. It is considered a risk diversification. You don’t have to rely solely on the Thai stock market. Salarymen like us can choose investments that are right for us more easily. And salaried people with low to medium incomes will benefit more in terms of tax benefits from the SSF fund deduction ratio increasing to 30%.
Disadvantages: Hold for 10 years, which many people may not like because they may be accustomed to LTF that holds for only 7 calendar years. And salaried people with high incomes may not be very happy because the SSF fund has a limit of only 200,000 baht and is combined with other retirement investments, giving them no tax reduction options like LTF
(originally, the LTF deduction limit was not included with other retirement tax reduction funds).
Super Saving Fund Extra (SSFX)
“Special Savings Fund” is a special tax-deductible fund that has a specified period for purchasing investment units between April and June 2020 only.
With an investment policy in securities registered in the Stock Exchange of Thailand, an average of not less than 65% of the net asset value (NAV) can be used to reduce taxes up to a maximum of 200,000 baht (excluding the normal SSF fund unit purchase limit).
Advantages: Suitable for investors who want to reduce their taxes by investing in Thai stocks when the stock price is falling and want to have an additional tax deduction of 200,000 baht in addition to the normal SSF fund.
Disadvantages: SSFX funds are available as a special case only this year and are only suitable for working people with income in high tax brackets because investing in SSFX funds is an additional part that will help them save more tax.
Whether it is investing in SSFX and SSF or any other fund, every fund has risks. However, the level of risk may vary depending on the type and characteristics of the fund. The higher the return, the higher the risk. This is in line with the concept of high risk, high return.
Therefore, we need to understand it well, see how much risk we can accept, what are our investment objectives? Are there any tax benefits to consider? Then, look at the investment policy, risks, conditions, and various benefits of that fund to see if they meet our needs.
For our own maximum benefit
For other articles on Finance and Investment, please read more at:
The LTF fund has been cancelled. If we have an LTF that has reached maturity, what should we do?
What’s new in the 2020 RMF Fund? What are the conditions? Is it better than before?
