The Fundisa unit trust fund, an initiative aimed at encouraging South Africans to save for their children’s higher education, has announced a bonus payment of R2,8-million for 2010. This is more than double the bonus payment of R1,2-million allocated at the end of last year.
Fundisa is a savings fund for education where the department of education pays in a bonus to top up the existing savings.
The bonus payment is shared by the investors currently using Fundisa to save towards a child’s tertiary education. The first R2 400 invested in the Fundisa fund every year qualifies for the bonus payment.
“What makes this bonus payment even more attractive is the fact that it comes in addition to the 8,5% return achieved by the Fundisa unit trust fund for the 12 months to the end of November. Adding the 25% bonus, this translates to a total return for the year of 33,5% on the first R2 400 invested,” says Peter Dempsey, deputy CEO of the Association for Savings and Investment South Africa (Asisa)
The Fundisa fund attracted over 6 100 new investors over the past 12 months to the end of November, bringing the number of unit holders to 13 522.
As at the end of November this year, assets under management for individual clients within the Fundisa fund stood at R18,2-million, an increase of 82% over the R10-million at the end of November last year. The Fundisa fund was launched in November 2007.
How it works: The Fundisa bonus grant
As a result of the bonus grant, investors in the Fundisa Fund have their investment enhanced by 25% every year to a maximum of R600 per learner. So if you save R200 each month for 12 months in the Fundisa Fund, you will see the R2 400 saved grow by R600 to R3 000. Furthermore, the R3 000 will also share in the overall investment return achieved by the fund in the next year.
However, to ensure that the money saved in the Fundisa fund is actually used to pay for a child’s education, the bonus payment (or a portion of it) falls away if the investment is withdrawn. The bonus payments received can only ever be used to pay for a child’s education at a government-recognised institution. Investors can, however, withdraw the savings arising from their contributions together with the normal returns on that capital at any time.
What is Fundisa?
The Fundisa fund is a low-risk fixed-interest income unit trust fund of funds administered by Stanlib. The underlying portfolios, which in turn invest in bonds, fixed deposits and other interest earning securities, are managed by Absa, Nedgroup Investments and Stanlib.
The fund is open to investors wanting to save for the higher education of a South African citizen or permanent resident. A minimum investment of R40 is required. The investor can then choose to pay R40 or more every month or top up the investment when money becomes available.
More information is available from the Fundisa website at www.fundisa.org.za.
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