LONG TERM SAVINGS ACCOUNT

What is a long-term savings account (LSA)?

The Government of Jamaica has introduced this Jamaican Dollar denominated tax-free account for individuals.  An individual is allowed to invest up to a maximum of one million dollars per year in a LSA account.  Interest paid or credited in respect of this account would not be subjected to tax.

How does a LSA work?

v     Long Term Saving Accounts are open only to individuals. 

v     The maximum deposit in any one-year must not exceed one million Jamaican dollars.  Note:  Compounded interest does not affect this maximum. 

v     Several accounts can be opened, but the aggregate deposit must not exceed one million dollars (even in the case of joint-holders).

v     Each deposit must be held for a period of five years without any withdrawal from the principal sum invested. 

v     If any portion of the principal is withdrawn during the term of the LSA, then the full tax of 25% retroactive to commencement date will be applied.

v     No more than 75% of the interest accrued in any one year may be withdrawn during that year.  Interest may be withdrawn every three months.

v     The account is not transferable, except on the death or bankruptcy of the investor.  In the case of joint holders, these names may be changed, but the changes must be registered with the Ministry.