Saving for Tertiary Education The Standard Bank Fundisa Fund
Besides the gift of life, there is one other equally significant gift a parent can give their children. A gift will set them up for life, and will never lose value. The gift of a good education. But with the costs of higher education continuing to rise, for many parents, paying for their children’s education is simply too expensive. In 2020, university fees could be as high as R91 100 per year, which is unaffordable for most.
However, with a little forward -thinking, planning ahead and discipline, you can start saving towards tertiary education as soon as your child is born. Fundisa is a way to do exactly that, says Sizwe Ndebele, Head of Bank Channels and Emerging Product at STANLIB.
Escalating Costs – An Example Assumptions
Current age of child
Current annual cost of tertiary education Duration of course
5yrs
R30 000 3 years
Approximate numbers of years until your child starts tertiary tuition 13 Current savings
Annual increase in contributions Expected annual growth in savings Expected annual inflation rate
Expected annual escalation in education costs Future costs
Your estimated total future education costs will amount to R308,960. To fund the costs, it is estimated that you will need to start contributing R660.00 per month.
Source: Liberty Excelsior Investments Education Needs Identifier. This example is for illustrative purposes only and assumptions have been made on the current cost of education.
the art and science of investing Fundisa Facts R0
8% 8% 6% 8%
• The amount saved in your Fundisa account, including any government grants, can be used to pay for tertiary education fees, textbooks and accommodation at any public tertiary institution.
• The government grant cannot be used for any purpose other than tertiary education and the nominated learner must register to study before the age of 35.
• The child you save for does not have to be your own, but should be a South African citizen and must study at an approved tertiary public place of learning recognised by the National Student Financial Aid Scheme (NSFAS).
• You can save for as many children as you wish. Fundisa accounts are transferable once a year which means you can nominate a new child including in the unfortunate case of death of a child.
• If you come directly to STANLIB, there is no initial fee and a low annual service fee of 1,25% (excl VAT) applies.
• If you access the savings vehicle with the assistance of a financial advisor, then an initial fee of up to 3% (excl. VAT) applies. The annual service fee of 1.25% (excl. VAT) still applies.
The cost of education has spiralled rapidly over the past 20 years, and with university fees likely to continue escalating by 8-10% each year, you’re in for a hefty bill if your child one day plans to tackle a three or four- year degree. Remember too that if you have more than one child or if your child has to take out a student loan to pay for the fees, the total cost will be much higher. There can be no question that there is a burning need to start saving as early as possible if you want to give your children the best education possible.
The Standard Bank Fundisa Fund makes it easy
From just R40 per month, anyone can invest in the Fundisa Fund and save towards their child’s tertiary education. Fundisa is managed by wealth management company, STANLIB, and invests in a basket of selected industry income funds, which generate attractive interest rates compared to a normal savings account.
A unique feature of this fund is an annual government and Collective Investments industry bonus of 25% of your net contributions, up to a maximum of R600 a year, per child, that must be used for tertiary education fees. For example, if you save R1200 per year (R100 per month), a further R300 will be added to your account each year. A saving of R2 400 per year will see government adding the maximum bonus amount of R600, bringing the total saving to R3 000.
You can withdraw the money you save in the Fundisa Fund at any stage without paying penalties, which is not advisable as you will lose a proportionate amount of government bonus that you had received. The bonus will only remain intact if you keep the money invested until your child starts studying at a tertiary institution.
For more information and to take advantage of this opportunity, call the Fundisa Call Centre 0860 FUNDISA (386 3472), visit a Standard Bank branch, or download a brochure and an application form from the STANLIB website:
www.stanlib.com.
STATUTORY DISCLOSURE The Fundisa Fund is not a bank deposit, but a collective investment scheme (unit trust) which is generally a medium to long term investment. The value of your investment may go down as well as up during the period of investment. Past performance is not necessarily a guide to future performance. The Fundisa Fund is traded at a ruling price and can engage in borrowing and scrip lending. A schedule of fees and charges and maximum commissions is available on request from STANLIB Collective Investments Limited (“the Manager”) Commission and incentives may be paid and if so, would be included in the overall costs. Liberty is a full member of the Association for Savings and Investments of South Africa (ASISA). The manager is a member of the Liberty Group of Companies. As neither STANLIB Wealth Management Limited nor its representative did a full needs analysis in respect of a particular investor, the investor understands that there may be limitation mentioned in this document with regard to the investor’s unique objectives, financial situation and particular needs. The information and content of this document are intended to be for information purpose only and STANLIB does not guarantee the suitability or potential value of any information contained herein. Trustees: Absa Bank Ltd, 6th Floor, Absa Towers North (6E1), 180 Commissioner Street, Johannesburg, 2001. Telephone No. 011 350 4000.
STANLIB Wealth Management Limited is an authorised Financial Services Provider in terms of the Financial Advisory and Intermediary Services Act 37 of 2002 (Licence No. 26/10/590) 5ZB399
Mid-July to mid-August is savings month and there is no better time to think about saving for your child’s education. Every child deserves a good education, but in order to afford it parents need to start saving as early as possible.
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