In this article, Students Mirror looks at the Best Education Trust Fund in Nigeria.
An educational trust fund is simply a trust established with the sole purpose of providing funding for education. Importantly, the terms of the trust provide that deposits or contributions to the trust can be made periodically, the funds are guided by a trustee for the specified educational purpose, and at the appropriate time, distributions and withdrawals can be made from the trust to fund the academic journey of beneficiaries.
An educational trust fund is a trust established with the primary aim of providing funding for someone’s education. The fund is established by a person or a group of people depositing a sum of money into a trust where it is managed by a person or third party, who is called a trustee, for the specified educational reason. It can take the form of a fund benefiting a single individual, or it can be a charitable holding benefiting a group of people, such as scholarship recipients, amongst others.
An education trust fund is often formed by a student’s parents or grandparents, other relatives, or friends, called the grantor. The beneficiaries are usually a young child or children. The trust fund is managed on the child’s behalf by the trustee, and money cannot be withdrawn and used from the trust fund until the child reaches a particular age, most often eighteen years of age. Once the beneficiary is of age, the money may be used to pay for his or her graduate school, trade school, or other enrolled educational programs, or any other incurred expenses depending on the grantor’s stipulations.
Best Education Savings Plans to Fund Your Child’s Education
Before one can set up an education trust fund, one needs to clearly define who their beneficiaries are. Is it for a single person or multiple people?
Most parents want their children to receive a high-quality education from preschool to university level. However, financing your child’s education might be a burden, as you have other responsibilities. Some financial institutions in the country have come up with education savings plans to help ease the payment of school fees for parents.
These plans assist parents so they don’t struggle to pay for their children’s school fees and other expenses that come with them. In addition, some of the education savings plans cover the payment of children’s school fees in the event of the demise of the parents or guardian.
The sole purpose of this article is to explain what education savings plans are and also list the various financial institutions that provide them in Nigeria.
1. Stanbic IBTC Bank
Stanbic IBTC Bank, one of Nigeria’s renowned financial institutions, has a scheme which they call the Children Education Saving Scheme (CHESS). With this scheme, a parent is allowed to set up and manage their child’s account just the way they want. The scheme is available to children ages one month to seventeen years old with additional benefits for parents who already have an account with the institution.
2. Leadway Insurance
Another education savings plan you should consider for your children’s education is provided by an insurance company known as Leadway Insurance. Their savings plan helps one save towards the education of their children while providing protection against death, other critical sickness, or disability that may be caused by a fatal accident.
3. AIICO Insurance
This insurance company offers two education savings plans, which are the Children’s Education Plan (CEP) and one other known as the Education Legacy Assurance Plan (ELAP). The former is a savings plan that is initiated to provide tuition fees at an earmarked educational milestone in the event of death.
4. Education Investment Plan of FCMB
With this investment plan, one can save towards their child’s education by investing either monthly, quarterly, or annually into an investment fund, and the bank will pay out when the plan finishes.
5. AXA Mansard EduPlan
AXA Mansard offers an education savings plan called The EduPlan. The education plan provides medical expense cover for a child against injuries sustained whilst engaged in school activities. Even in the event of the death of a parent or guardian, the child will still enjoy the benefits of a standard education.
6. ARM Life’s Education Plan
With this education savings plan, one can invest as low as five thousand naira monthly into their child’s account. The ARM life insurance plan gives you a lot of benefits, such as having access to your money without charges during the agreed period, among others.
7. Union Bank Coverdell Education Saving Plans
This education savings plan is available through Union Bank and UnionBanc Investment Services. With this education savings plan, one can contribute up to about two thousand dollars per year for a child. Your savings can be used to fund elementary and secondary school expenses, as well as for higher education.