Well, it all depends on a few things. Here are a few questions you will need to consider:
Are you a disciplined saver? Be honest, can you pay regular monthly amounts to a savings account without having to dip into it for that absolutely-must-have new flat screen TV? Or, would you prefer to squirrel your money away for a set time period, without being able to access it?
Are you starting your savings early (or not): For example, are you saving during pregnancy, or is your child just starting Grade 8 and you’ve realised there's tertiary education to consider?
How much can you afford to put away on a regular basis? If you're not sure, try this easy-to-use education calculator.
Being able to have access your investment can be really useful the closer your son or daughter gets to university or college. You’ll be able to pay a deposit or acceptance fee (if required) from your investment. Likewise if your child is going to be staying in digs rather than res - you may need cash at hand to secure a flat or room.
Endowments, unit trusts, fixed deposits or tax free savings
The types of education plans that are useful here are the ones that are unit-trust based. You can invest directly into a unit trust of your choice or a tax-free plan. Both options offer tax benefits, access to your funds and good growth opportunities over the medium to long term.
An endowment-based education plan lets you save on a regular basis, for a set period of time. You can choose to stop investing and leave the plan as “paid up” until the maturity date, the date the on which plan pays out. The investment term is usually 10 or 15 years.
Unit trusts and endowments are ideal if you have 10 - 15 years before tertiary education takes place. There’s time enough for your investment to perform and ride out the fluctuations in the market.
Other options include 32-day notice accounts or fixed deposits. The opportunity for growth may be a little less but the return is guaranteed. Ideal for the child who's just started grade 8 and there's tertiary education to consider; scenario.
Is time on your side?
There is no shortage of education plans – what matters most is time. The earlier you start, the better.