At a reception attended by the Minister of Education today, the Fundisa
Fund, a savings scheme for further and higher education, was launched.
A public-private partnership between the Department of Education and the
Association of Collective Investments, the Fundisa Fund encourages lower income
earners to save for their children's further education at either a public
college or a university.
Savers are able to open Fundisa Fund savings accounts from today. Savers
will receive up to a quarter of what they save each year as a bonus. For
example, if R1 200 is saved a year, the fund will add another R300 to the saved
sum.
In her budget speech on 29 May this year the Minister of Education, Naledi
Pandor MP, committed R20 million to a three-year pilot project to test if there
is demand for a savings scheme like the Fundisa Fund.
The Minister of Education said: "If the pilot scheme is a success, we'll be
able to expand Fundisa's reach. We will not see the impact of Fundisa for many
years, but when children begin to redeem their Fundisa funds, we'll be able to
see how far sighted we've been. In future, I hope that qualifying families will
be able to draw on a combination of their Fundisa savings and National Student
Financial Aid Scheme (NSFAS) funding to support their children's higher
education. It is a future that will bring new hope to many of our people."
Investors must have a Mzansi or similar account and be South African
citizens. They will be able to access Fundisa through most collective
investment companies as well as Absa, Nedbank, Standard Bank and the Post
Office.
Chief Executive of the Association of Collective Investments Di Turpin
said:
"Education is a key factor in promoting wealth generation and higher living
standards and we believe Fundisa can play a meaningful role by incentivising
families to plan for a child's education beyond basic high schooling."
"South Africa needs to take urgent action to reverse the dismal savings rate
and Fundisa is one of the iniatives being launched by the industry to encourage
a savings habit. Collective investments because of the low costs and highly
regulated environment are an ideal vehicle for savings."
The Collective Investments industry will work closely with the National
Student Financial Aid Scheme (NSFAS). Fundisa will be complimentary to existing
funding mechanisms provided by NSFAS in the form of accessible student loans
for qualifying low-income families.
The Fundisa investment portfolio will invest in low risk instruments such as
money market securities, bank deposits and government bonds. In the longer term
the fund may consider offering an equity option giving investors the
opportunity to earn the higher returns of equities for beneficiaries who are
very young and therefore have a long investment horizon.
Enqueries:
Lunga Ngqengelele
Ministry of Education
Ministerial Spokesperson
Tel: 012 312 5538
Cell: 082 566 0446
E-mail: ngqengelele.l@doe.gov.za