Invest R1,200 a year and collect a 25% bonus for your children's education
Earlier this week I spoke to a new parent who only earns R8,000 a month. With a three month old baby, she was concerned that she wouldn't have enough money for her child's education when the time came to send the child to school.
She could only afford to save R1,200 a year for her child's education and put her first lump sum savings into a 32 day savings account that gave her a measly 5% interest rate.
But her money was not growing as fast as it should in that 32 day savings account.
I couldn't believe that she didn't know about one investment fund, managed by government that pays you a 25% bonus for saving towards your child's education...
How you can collect a 25% bonus every year
The Fundisa Fund is an education savings account that encourages parents that earn less than R180,000 a year to save for their children’s education.
When you start saving jut R100 a month in the Fundisa Fund your account will receive an incentive bonus every year, just because you’re saving towards your children’ education. According to Fundisa, “The amount of the bonus can be as much as 25% (one quarter) of the money saved each year, to a maximum of R600 per child.”
This means that if you have more than one child, you can open a savings account for each child and collect your 25% up to a maximum of R600.
The more you invest, the bigger your rewards
If you save just R100 a month in Fundisa, you total for the year will come to R1,200 that you’ve invested. You’ll qualify to receive a R300 bonus that goes towards your child’s education. However, the more you save the more you receive...
The best way to get the maximum bonus of R600 is to start with a lump sum of R1,200. Once this money is in the account add R100 extra to the account every month. By the end of the first year, you would have saved R2, 400 in total for that year. This amount is exactly how much you’ll need to save to qualify for the maximum bonus of R600 a year.
This money does not belong to you though. The Fundisa Fund clearly stipulates that the extra bonus can only be used by the child for educational purposes. If you use the money for anything else, you lose the incentive and can only access the money you’ve saved.
To find out more about the Fundisa Fund visit http://www.fundisa.org.za/