For many first-time parents, parenthood is an extremely scary and daunting step forward to building a family. As we try to capture memories and joy of building our own families, we also face new worries, such as our children’s futures. This starts from the very basics of their quality of education, especially in a climate such as Singapore, where university degrees are valued yet expensive to obtain.
Therefore, saving plans for their education is extremely important, yet can be stressful, especially for first-time parents. However, do not worry. Read on if you would like to learn more about the best education savings plan options for your little one!
What is an education savings plan?
Where education is concerned, quality of education, together with cost considerations, is a primary concern. A 4-year university degree in Singapore costs upwards of $40,000. Hence, parents often save up for their child’s education to avoid taking out bank education loans, which charge interest fees upon repayment.
One option many parents opt for is to store savings in a bank account, but with inflation of 2.5% per annum, the value of savings may erode over time. Thus, keeping a savings bank account for education is a less attractive option. That’s when education savings plans come in handy!
Education savings plans are long-term commitments that aim to provide funds for your child’s university education by a specified time. Therefore, it is always better to start saving early so the monthly commitment is smaller and more digestible. If you start later, you have less time to accumulate the amount, with the result of having higher monthly commitment/s and money set aside. If your child obtains a scholarship or bursary, the money can be withdrawn for other purposes, such as wedding costs.
How does an education savings plan work?
There are many variations of an education savings plan. For example, some are specific to education and pay out a steady stream of money over the years, while others pay out a lump sum after a certain period of time. One thing’s for sure—when you commit to an education savings plan, you are committing to paying a regular premium for a certain number of years.
Why commit to an education savings plan?
- Enforces discipline – While saving money for a specific usage is ideal, sticking to a monthly savings and spending target can be difficult. Hence, using an endowed education endowment plan will enforce discipline and ensure that you save that certain amount of money each month. On the whole, this will automatically transfer the money over from your bank account via GIRO regularly.
- Flexible and suited to your needs – Education endowment plans are generally flexible and individually catered in terms of number of years, amount of money, and monthly deposits. Thus, education savings plans all depend on and vary from individual to individual.
- Other uses for the fund – While the main objective of the endowment fund is to fund your child’s education, you can certainly add on riders to ensure that the fund can be paid out if death, disability, or critical illness occurs. As a result, this will provide greater peace of mind for you, and you can be sure that your child will have sufficient funds.
Things to take note of before choosing an education savings plan
- Monthly budgeting – While saving for your little one’s education is important, it is also crucial to ensure that your monthly budgeting is well-rounded regarding personal retirement, emergency savings, insurance and monthly income to purchase necessities.
- Saving considerations – If you are planning to use an education savings plan, it is important to plan out the number of years before your child enters university, the intended course of study, and the price and total cost of study.
What to note when choosing a plan
When choosing the best endowment plan for your children, you should consider the following factors:
- Returns – A good return is important because the main objective is to save. Hence it would be best if you considered projected returns per annum. However, you should note that returns also depend on the number of years you are saving for. For example, saving for a shorter number of years yields a lower return; for this reason, it is always better to start saving early.
- Flexibility of payout – Flexibility is extremely important, especially if you prefer smaller payouts throughout the years, such as every year or so. Otherwise, you can also opt for lump-sum payouts closer to university enrollment.
- Flexibility of premiums – Some plans offer more flexibility of premiums. For instance, you can choose between 5, 10 or 15 years to save and pay monthly, while others offer the flexibility of paying premiums up to your child’s enrollment in university. This will allow you to stretch out the years taken to save and pay, thus reducing monthly commitment.
Best Education Savings Plan in Singapore
Here are 11 of the best education savings plans in Singapore, offering flexible options, guaranteed returns, and additional coverage to secure your child’s future.
The Tokio Marine KidStart savings plan is designed to help parents save for their child’s education. It offers a structured savings approach with guaranteed returns at the end of the plan. Parents can start saving early and enjoy the peace of mind that comes with financial protection for their child. The plan is flexible and can be customized according to your needs. Tokio Marine also offers added benefits like coverage for critical illness, ensuring a comprehensive approach to your child’s financial future.
Period: Flexible terms, typically 10-25 years
Investment: Regular premiums over the chosen policy term
Interest Rate: Varies based on plan performance
Other Benefits: Critical illness coverage, guaranteed cash value, bonus payouts
Website: Tokio Marine KidStart
Contact Number: +65 6323 3111
Manulife Educate is a long-term savings plan designed to help parents save for their children’s education. It offers guaranteed returns and a bonus system, ensuring your child’s education fund grows steadily over time. The plan is flexible, with options to adjust the premium amount and duration. Additionally, it provides coverage in the event of death or total and permanent disability, giving parents peace of mind. With its focus on education funding, Manulife Educate is a great choice for securing your child’s future.
Period: Flexible terms, typically 10-20 years
Investment: Regular premiums over the policy term
Interest Rate: Varies based on plan performance
Other Benefits: Critical illness and death coverage, bonus payouts, guaranteed cash value
Website: Manulife Educate
Contact Number: +65 6833 8188
NTUC Gro Junior Saver is a flexible savings plan designed to help parents accumulate funds for their child’s future educational needs. With the option to choose premium terms, this plan offers guaranteed returns and a loyalty bonus to boost savings. Additionally, the plan includes coverage for death and total and permanent disability, providing financial protection for your child. It is an ideal choice for parents seeking a structured and secure way to save for their child’s education while enjoying peace of mind.
Period: Flexible terms, typically 5-25 years
Investment: Regular premiums over the policy term
Interest Rate: Varies depending on plan performance
Other Benefits: Death and disability coverage, loyalty bonuses, guaranteed payouts
Website: NTUC Gro Junior Saver
Contact Number: +65 6336 0777
Etiqa Enrich Flex is a flexible savings plan designed to help parents save for their child’s education while offering financial protection. It combines both savings and insurance, with guaranteed returns over time. The plan allows for flexible premium payments and provides a breakeven point by the 15th year, ensuring that your funds grow steadily. Additionally, it offers coverage for death and total and permanent disability, giving you peace of mind. It’s an excellent choice for parents looking for a long-term, adaptable solution for their child’s education.
Period: Flexible terms
Investment: Regular premiums, flexible payment options
Interest Rate: Varies based on performance
Other Benefits: Death and disability coverage, guaranteed returns, flexible payment options
Website: Etiqa Enrich Flex
Contact Number: +65 6887 8777
China Taiping i Saver 8 is a short-term education savings plan that helps parents save efficiently for their child’s future. With a premium payment period of only two years, this plan provides a lump sum payout after eight years, making it an ideal choice for those looking for a quicker way to accumulate education funds. The plan offers guaranteed returns and potential bonuses, ensuring your savings grow. Additionally, it includes financial protection for your child in case of unforeseen circumstances, like death or total and permanent disability.
Period: 8 years
Investment: Premiums paid over 2 years
Interest Rate: Varies based on plan performance
Other Benefits: Death and disability coverage, guaranteed returns, potential bonuses
Website: China Taiping i Saver 8
Contact Number: +65 6325 5566
China Taiping i-Cash (III) is a flexible savings plan that offers both guaranteed returns and regular cashback benefits. This plan provides an option to choose between 5- or 10-year premium payment terms, making it adaptable to various financial needs. It also ensures an annual cashback of 1% of the basic sum assured, offering additional liquidity during the policy term. In addition to saving for education, it provides coverage for death and total and permanent disability, securing your child’s future.
Period: Flexible terms (5 or 10 years)
Investment: Premiums paid over 5 or 10 years
Interest Rate: Varies based on plan performance
Other Benefits: Death and disability coverage, annual cashback, guaranteed returns
Website: China Taiping i-Cash III
Contact Number: +65 6325 5566
Singlife ChoiceSaver is a flexible savings plan designed to help parents save for their child’s education while providing financial protection. The plan allows policyholders to select a customized payout date that aligns with their child’s educational milestones. It offers guaranteed returns and can be tailored to fit your needs, with options for both regular and lump sum premium payments. Additionally, it includes death and total and permanent disability coverage, ensuring peace of mind while saving for the future.
Period: Flexible terms
Investment: Regular or lump sum premium payments
Interest Rate: Varies based on plan performance
Other Benefits: Death and disability coverage, flexible payout options, guaranteed returns
Website: Singlife ChoiceSaver
Contact Number: +65 6827 8000
The POSB Kids’ Savings Account is designed to help children learn about saving from a young age while earning interest on their deposits. This account provides daily interest on balances and comes with no monthly fees, making it a great way to encourage good saving habits. It’s easy for parents to set up, and children can enjoy simple features like personalized ATM cards and access to the POSB Digibank app. The account also helps parents set aside money for their child’s future education needs.
Period: Ongoing as long as the account is active
Investment: Regular deposits
Interest Rate: Interest is earned daily on the balance
Other Benefits: No monthly fees, personalized ATM card, access to Digibank app
Website: POSB Kids’ Savings Account
Contact Number: +65 1800 367 2268
The UOB Kids’ Savings Account is a simple and secure way for parents to help their children build a strong savings habit. With this account, children earn interest on their savings, and parents can monitor and manage the account through the UOB Mighty app. It’s designed for children up to 18 years old, offering no monthly fees and the ability to set up regular deposits. The account also provides a safe platform for children to start learning about managing money, with incentives for saving.
Period: Ongoing as long as the account is active
Investment: Regular deposits
Interest Rate: Earns interest on the balance
Other Benefits: No monthly fees, access to UOB Mighty app, incentives for saving
Website: UOB Kids’ Savings Account
Contact Number: +65 6222 2121
The OCBC Kids’ Savings Account is designed to help children develop good saving habits while earning interest on their balance. This account offers a simple way for parents to start saving for their child’s future, including education. Children can enjoy access to a personalized ATM card and use the OCBC Pay Anyone feature to send money. The account comes with no monthly fees and provides a secure platform for children to learn about managing their finances.
Period: Ongoing as long as the account is active
Investment: Regular deposits
Interest Rate: Earns interest on the balance
Other Benefits: No monthly fees, personalized ATM card, access to OCBC Pay Anyone
Website: OCBC Kids’ Savings Account
Contact Number: +65 6363 3333
Standard Chartered Kids’ Savings Account
The Standard Chartered Kids’ Savings Account is designed to encourage young children to develop a habit of saving. It offers a secure platform for parents to save for their child’s future while teaching financial responsibility. The account provides interest on the balance and includes a personalized debit card for children to access their savings. Parents can easily manage the account through the Standard Chartered mobile banking app, making it simple to track and deposit funds.
Period: Ongoing as long as the account is active
Investment: Regular deposits
Interest Rate: Earns interest on the balance
Other Benefits: No monthly fees, personalized debit card, access to mobile banking app
Website: Standard Chartered Kids’ Savings Account
Contact Number: +65 6747 7000
Choosing the right educational savings plan is crucial for ensuring your child’s future is financially secure. Whether you’re looking for flexible options like the Singlife ChoiceSaver or a more structured plan such as the China Taiping i Saver 8, there are various plans available to suit different needs. Each plan offers unique benefits, including guaranteed returns, coverage for unforeseen events, and the ability to adjust the premium payments to fit your budget. By investing early, you can provide your child with the financial foundation they need for their education, giving both you and your child peace of mind for years to come. Take the time to evaluate the options, consider your family’s financial goals, and consult with a financial advisor to choose the best plan for your needs.
Want to know more about education savings plan? Read: Education in Singapore
