Give the gift of education this festive season
With the December holidays edging closer, most people are still keeping a close rein on their spending as costs everywhere seem to continue to rise. However, with the fantastic saving opportunities available with tax-free investments, this festive season is a good opportunity for South Africans to consider longer lasting gifts for their children.
With the pressure on parents to come up with longer-lasting, more economical gifts for loved ones this year, one of the best presents one can offer is the opportunity for a child’s good education – and government supported tax-free investments are the perfect tool to achieve this.
A tax-free investment is a long-term savings vehicle that was introduced by the government to encourage South Africans to manage their money better. The tax-free savings allows investors to invest a relatively small amount of money and take advantage of the medium-long term benefits of compounding, without paying any tax on interest, dividends or capital gains.
So this way, by investing relatively small monthly payments (the amount it would cost to buy a small gift for example) the investment can compound and can accumulate an attractive lump sum by the time the child turns 18 and is able to take control of the investment. A substantial lump sum like this could make all the difference when it comes to covering for university fees and other associated costs.
Education is one of the most significant avenues through which childhood aspirations can be realised. While saving for your child’s education may be the primary goal for opening a tax-free investment, it is without a doubt the gift that will keep on giving if the investment is managed sensibly for the long-term.
For more information about tax-free investments with Nedgroup Investments click here.