Stanlib hails launch of Fundisa educational savings account

STANLIB, the country’s largest unit trust company, today (Tuesday, November 13) applauded this week’s launch of the Fundisa educational savings account by the Association of Collective Investments (ACI), dubbing it “a breakthrough concept with the capacity to change hundreds of thousands of lives by leveraging the power of sustained saving”.

A top-up bonus adds 25% to the money saved through Fundisa. The bonus – to a maximum of R600 a year – is provided by a Government subsidy with a partial sponsorship from the investment industry. It applies as long as the savings pay for the college or university education of a learner designated by the saver.

Fundisa is aimed at low-income groups who use basic banking services. The saver must already have a Mzanzi, Standard Bank E-Plan or similar account and produce a green bar-coded ID book.
 
If clients close their accounts and take back their money, accrued bonuses are returned to the Government.

Anthony Katakuzinos (name), Director Client Service at STANLIB and Deputy Chairman of the Association of Collective Investments, commented: “Government, the Department of Education, the Financial Sector Charter Council, the ACI and other role-players are to be congratulated on this life-transforming concept.

“Fundisa accountholders are not promised a handout but a savings incentive. The bonus entrenches the habit of saving and underlines the value of education as a means of self-help and upliftment.

“A simple subsidy might entrench dependence. In contrast, Fundisa enhances self-esteem and builds the savings discipline.

“Most people who start at the bottom share one ambition – to make sure the next generation have a better start in life than they had. Fundisa is a way of putting that wish to work – that’s why we’re so proud of it.”

He said the banking and investment industries could take pride in developing of “a breakthrough concept with the capacity to change hundreds of thousands of lives by leveraging the power of sustained saving”.

For as little as R40 a month, an accountholder can start saving through Fundisa. Any South African citizen may open a Fundisa account for the benefit of any child.

STANLIB, via the ACI, helped shape the product over a two-year development period.

The unit trust leader is a long-term contributor to industry efforts to widen access to financial products to ensure greater economic participation by previously marginalised groups – a key goal of the Financial Sector Charter

Katakuzinos noted: “We are confident Fundisa will take off with the broad market of low-income earners and as a result STANLIB has committed R4 million towards the private sector contribution to the grant pool.

“Timing is good. Recent wage increases have been close to 8% and in the recent past most pay rises have been inflation-positive. This suggests many families will be in a position to put money away for the education of their children and earn their Fundisa bonuses.”

STANLIB has been appointed asset manager of the Standard Bank Fundisa Fund.

Fundisa operates like a unit trust account. All Fundisa funds are managed by STANLIB in a range of selected industry income funds.

Money is invested in low-risk cash and government bonds. The Government bonus is calculated on the amount saved in the 12 months ending each September and is paid into the investor’s account the following January.

Katakuzinos said: “Standard Bank and STANLIB had our Fundisa product ready from the day of the ACI launch. Fundisa application forms will shortly be available at every Standard Bank branch a well as through the STANLIB call centre and web site.

“As with all new concepts, considerable market education will be necessary, but we are committing significant resources to ensure awareness remains high.

”This is not a temporary burst of marketing activity, but a long-term commitment that reflects STANLIB values and our strategy of reaching out to communities that were excluded from the financial and investment sector for far too long.”

* Fundisa accounts that are linked to a Standard Bank account can also be accessed on Standard Bank ATMs. Fundisa accounts may also be opened through the STANLIB contact centre on 086 123 FUNDISA (3863471).