With the rising costs of education, investing for your children’s education is no longer a luxury but rather a necessity.

A 2016 report from City Press calculated that education for your child starting from Grade R to matriculation at an average fee-paying school would cost you approximately R253 000, and former Model-C schools costing around R676 000.

Fortunately, there are various saving options for parents which are listed below:


If you can only afford small amounts but still want to save for education, this investment tool is a good option.

This is an education savings plan by the government, the National Student Financial Aid Scheme and the Association for Savings and Investment South Africa. This type of savings plan has the benefit of a top-up bonus annually as a reward. This can be as much as 25% of the amount saved per year.

The minimum contribution is R40 per month, and there is no maximum. However, Fundisa is designed for lower-income earners. Only families that earn less than R180 000 per year qualify.

Tax-free Savings Account

A tax-free savings account can be opened up in the name of your child. There is an annual limit of R30 000 and a lifetime limit of R500 000.

You will accumulate R500 000 by the time they are 16 if you start contributing from when they are born. With the power of compound interest, a relatively modest start-up investment should be more than enough to cover the cost of your child’s education.


If you are scared that you might be tempted to use some of the money that you are saving for your child’s education, consider taking out a policy

Most education plans that are on offer are generally endowment policies. This means that a monthly payment is made for a specified period and a lump sum is paid out at the end of the period. It is important to note that the minimum investment term is generally 5 years. 

There are education saving endowment policies from various South African finance institutions, eg. Momentum. Monthly contributions can start as low as R150. Be sure to select a package that will cover your monthly contributions in the event of permanent disability or death. It could also be beneficial to select a plan that is able to give you a payment holiday if you are under financial strain for a couple of months. 

Unit Trusts

Most experts view unit trusts as the best way to save towards a child’s tuition fees. The long term returns on unit trusts are consistently higher than returns on cash savings and usually also better than those on educational policies.

A unit trust has a better chance of outperforming South African inflation rates than typical bank savings account. Also, a significant amount of your interest from your unit trust is exempt from tax.