Like most parents, you want your child to get a quality education starting from preschool up to college. However, financing your child’s education might be challenging, as you have other bills to pay. To help ease the payment of school fees for parents, some financial institutions in the country have come up with education savings plans.
These plans help ensure parents don’t struggle in paying for their children’s education; in addition to that, some of the education savings plans cover the payment of children’s school fees in the situation of the demise of the parents.
The aim of this post is to briefly explain what education savings plans are, and also list out top seven (7) financial institutions that provide them in Nigeria.
What Are Education Savings Plans?
Education savings plans offer the combined benefits of savings and protection to the children of the subscribers to the plans. These plans are created to provide financial protection to children so that their education never gets hindered by any unfortunate events (such as disability, sickness or death of the sponsor) in the future.
Here are the top seven companies in Nigeria that offer education savings plans.
7 Companies that Offer Education Savings Plans
- Stanbic IBTC Bank
- Leadway Insurance
- AIICO Insurance
- FCMB Education Investment Plan
- AXA Mansard EduPlan
- ARM Life’s Education Plan
- Union Bank Coverdell Education Saving Plans
1. Stanbic IBTC Bank
At Stanbic IBTC Bank, they have a scheme called the Children Education Saving Scheme (CHESS). With a CHESS savings account, you are allowed to set up and manage your child’s account just the way you want. The account is available to children ages 1 month to 17 years, with additional benefits for parents who already have an account with the bank.
CHESS offers the following:
- 1% interest above the interest rate earned on savings accounts
- One free withdrawal every quarter
- Payments of cheques and dividend warrants once KYC requirements are met
For more information about this scheme, click here.
2. Leadway Insurance
Another education savings plan you should consider for your child’s education, is provided by Leadway Insurance. This savings plan helps you save towards the education of your children while providing protection against death, critical illness or permanent disability caused by an accident.
With this scheme, you can save up to a period of three years or longer, during which you make regular contributions. You pay those contributions monthly, quarterly, half yearly or annually (as you prefer) subject to a minimum of N10,000.00 a month. While in the savings account, your contributions accrue interest at Leadway’s standard interest rate.
You can take out a loan against your savings balance at any time during the policy tenure, subject to terms and conditions.
3. AIICO Insurance
This insurance company offers two education savings plans, which are the Children Education Plan (CEP) and the Education Legacy Assurance Plan (ELAP).
The Children Education Plan (CEP) is a savings plan that is created to provide school fees at an earmarked educational milestone in the event of death. As for the Education Legacy Assurance Plan (ELAP), it is a savings plan targeted towards financing the future education of a named child in the event of death or permanent disability of parent or guardian.
Click here for more information on these two plans.
4. FCMB Education Investment Plan
With this investment plan, you can save towards your child’s education by investing periodically (monthly/quarterly/yearly) into an investment fund, and the bank will pay out when the plan ends.
The Education Investment Plan by FCMB is a convenient and secure way to save for your child’s university education in the USA, UK, South Africa, Ghana, and Nigeria. Some of the features of this education savings plan include:
- Parents control the assets until the child reaches legal age
- Package can be operated for an unborn child
- Total amount contributed is guaranteed if the investment is held for more than a year
- Funds are not frozen upon the likely event of the demise of the investor if they take a life insurance cover.
For more information about the FCMB Education Investment Plan, click here.
5. AXA Mansard EduPlan
AXA Mansard offers an education savings plan called “EduPlan.” The plan provides a medical expense cover for a child, against injuries sustained whilst engaged in school activities. With this plan, even in the event of the death of the parent, the child will still enjoy the benefits of quality education. Below are some of the features of the EduPlan by AXA Mansard:
- Guaranteed payment of fees and other educational requirements
- Allowance of installmental payment of premium
- Benefit is paid directly to the school
- Medical cover of ₦50,000 per annum
If you will like to learn more about this education savings plan, you can visit their website here.
6. ARM Life’s Education Plan
With this education savings plan you can invest as low as N5000 monthly into your child’s account. The ARM life insurance plan gives you a lot of benefits. Here are some of them listed below:
- You will get a tax free lump sum of all your investments and interest at the end of the year which can be used to fund your child’s education
- Access to your money without charges during the agreed period ( this will only be applicable after three years)
- In the case of death of the policy holder, ARM will continue to make contributions on behalf of the deceased and will make available to beneficiary at full maturity.
For more information about this education savings plan, click here.
7. Union Bank Coverdell Education Saving Plans
This savings plan is available through Union Bank and UnionBanc Investment services. With this education savings plan you can contribute up to a maximum $2,000 per year per child.
However, this is subject to IRS- imposed income restrictions. Below are some of the benefits of setting up the coverdell education savings accounts;
- Savings grow tax deferred, and qualified withdrawals can be tax free.
- You can direct the way in which your savings will be invested.
- You may transfer unused funds to another family member
- Your savings can be used to fund elementary and secondary expenses, as well as for university education.
Click here to learn more about this education savings plans.
The above are the top financial and insurance institutions that provide education savings plans in the country. Visit their websites using the links in the article and find out more about their offers.