Tips on Saving for Children’s Education
Your children’s education is important for their future. Every parent knows the importance of education for their child to be competitive, survival and successful in modern society. With the escalating prices of everything including education, the need to save is essential in order to ensure that our children can receive the best education that money can buy. Here are a few tips on saving for your children’s education.
Buy an education policy
An education policy or plan is a financial product particularly designed to save you funds you will need to pay for your child’s education in the future. You need to regularly pay a certain amount of minimal premium to the policy, which in turn will pay fully or partially (depending on your policy) your child’s education in the future.
To hit two birds in one stone, you can also opt to buy an insurance policy with an education investment so that you are able to secure your future as well as the education of your child.
Open a Skim Simpanan Pendidikan Nasional (SSPN)
SSPN is a national Education Savings Scheme launched in 2004 through the Perbadanan Tabung Pendidikan Tinggi Nasional (PTPTN) to help Malaysians save for their children’s education. The PTPTN manages and invests deposits under the Islamic model of “Wakalah Bil Istithmar”, a Shariah-based investment contract in which the investor authorizes his agent to conduct specific investing activities for a fee. The national education savings differs from ordinary bank savings because it provides a 4% annual dividend returns. Moreover, low income depositors are entitled to an annual tax relief for these savings. Malaysian citizens with child beneficiary can open an and SSPN account in any designated banks or through PTPTN counter/ agent.
Save money in Bank
The most apparent way to set aside money savings for your children’s education is to open a bank account. The junior savings account is ideal because it is specifically designed for children. These accounts often give higher interest rates than regular savings accounts. Others provide student performance rewards and accident coverage for children. To complement the savings, you should educate and encourage your children to save for their education by letting him or her contribute to the accounts from their own personal pocket.
If you have a large sum of money you can keep for a long time, you may put up a Fixed Deposit (FD) account in the bank which even has higher interest rates than savings account. You may schedule the FD account’s maturity on your child’s education so that it will accumulate interest earnings.
Invest in Unit trust Funds
You can invest on a balanced equity unit trust funds which provide a percentage of its proceeds as savings for your children’s education Enroll child in Public schools.
To prepare for the more expensive college fees, you can opt to enrol your child in a public school in their elementary and secondary education in the meantime, so that you can save some money for their college education. To further save money, you can opt to buy second hand books which are way cheaper than brand new one as well as buy simple schools supplies instead of branded ones.