Guaranteed returns of 25%?

Guaranteed returns of 25%?

There are few things that bug me more than seeing people being ripped off by insurance companies. I have just come across an advert for an education plan by one of the large SA insurance companies…for just R150 per month for 10 years…blah blah blah…stay far away from these policies – they are expensive and restrictive. As far as I am concerned people who want to save for their children’s education should first get rid of their debt and then they should make use of the Fundisa offering before considering anything else.

There is a unit trust offering with a guaranteed return of at least 25% so long as the funds are paid to an educational institution directly… This guarantee is from the government who are paying a 25% bonus to investors on a first-come-first-served basis (from a limited bonus pool – this is part of a pilot project) and on top of this there is the growth in the underlying fund.

So last year, I received a ±35% return on my investment…in these markets! Try and beat that! For the cynics out there, the “catches” are as follows: You can invest as much as you want but you only qualify for the bonus on the first R200 per learner. You can draw the funds out at any stage but will only get the bonus if the funds are paid to an educational institution directly (at this stage it has to be a tertiary institution).

They only communicate with you via SMS. There are no initial fees! You can substitute learners if you no longer need it for your kids. You can pay in as little as R40 per month. The underlying fund is a “boring’ income fund. In my opinion this is the best education offering in the country…only problem is that the take up has not been that great and I suspect that is largely because there is no incentive for advisors to sell it.

For more information and an application form go to