Guiding consumers since 2009

Excellent deal to save for someone’s education

By Staff Writer

By Bryan Hirsch

Saving is the last thing on most people’s minds because of the increasing cost of living, inflation and interest rates.

But looking at the headlines and newspaper reports, the need for saving is being touted more than ever before.

We often do not recognise an opportunity. But we need only look at how well some of the BEE deals, including Sasol and Vodacom, have done.

Now there is an excellent education deal, Fundisa, so make sure you don’t miss this one.

Fundisa is a savings account that rewards you for saving for a loved one’s education. A bonus is allocated to the account each year, depending on how much was saved during the year.

The bonus can be as much as 25 percent of the money saved in a year, but is limited to R600 a year for each pupil. This effectively means that R2400 can be saved in a year. A bigger amount than this can be saved but the bonus will be limited to R600.

A number of conditions are attached. Bonuses can only be used by pupils whose education you are saving for and if you access the funds, or the pupil decides not to study, the bonus amount is forfeited.

This fantastic concept is open to all South Africans who would like to help educate someone that they care about, provided that the pupil is a South African. The account holder does not have to be related to the pupil.

The money saved is invested in income unit trusts, which in turn invest in government bonds and bank deposits.

The interest, income and growth from the investment accumulates to the capital amount, as does the bonus amount. Yearly statements are sent to the sponsor giving a breakdown of the investment as well as the bonus paid for the savings year.

Once pupils are ready to study (has to be before they are 35), the unit trust company will send an award certificate to the sponsor. The pupil must take the certificate to the college or university and the institution will claim the money from Fundisa. Payment is made directly to the college or university.

Costs involved are an yearlyl fee of 1,25 percent, which is taken from the income earned. The minimum investment is R40 a month.

The only other costs are a small commission if one uses the services of a financial adviser and maybe a debit-order fee at the bank where the account is held.

The Fundisa project is a government and unit trust company three-year pilot project. It is aimed at encouraging South Africans to save for the education of their loved ones.

Recent Articles

Featured The bank took money from my account – is this allowed?

You’ve just deposited money into your account and suddenly you see a notification from your bank. Money has been deducted from your account to pay the outstanding debt that you have with the bank. Is this allowed?

How much does it cost to draft a will?

Having a Will allows you to determine who inherits your property when you die. If you die intestate, the government will determine how to distribute your assets. Many people die intestate because they don’t know how to draft a will or are intimidated by the costs of drafting one.

Is your home correctly priced for the current market?

The property market is typically in either one of two phases, a buyers’ market or a sellers’ market. According to real estate experts, we are currently in a buyer’s market. For this reason, it is important as a seller to correctly price your house to ensure interested buyers and a valuable sale in the end.

Fuel rewards programme – how to fill up on petrol and points

South Africa’s volatile economy has often meant that factors like the fuel price bear the brunt. This year alone the country’s fuel price has fluctuated by between R1.50 to almost R3, which has put increasing pressure on motorists. That said, many of the bigger South African brands have provided some relief by way of fuel rewards programmes.

Deals

Wax On Wax Off Wednesdays at Rouge Day Spa

Price: From R50
When: Wednesdays
Where: Cape Town

Aarya Restaurant Christmas Lunch Special

Price: R425
When: 25 December 2019
Where: Johannesburg

Da Vinci’s Tantalising Tuesday Pizza Special

Price: Available on request
When: Tuesdays
Where: Cape Town