Saving for Children Educatio

Saving for Children Education with Children Development Account

 Sorry for not updating on this blog so often as been really busy with Indonesia Project lately and also my ToTo & 4D Predictions at House Of ToTo. Things been going pretty fast pace for me and to be frank it is stressful but I like this. Living in a relax environment dun really suit me well since for young I had been "trained" to survive in a "Dog eat Dog" world.

Anyway today I going to talk about Saving for Children Education again. I had a post previously titled "Child Education Planning, is Saving, Endowment  or ILP Better?" which talks about Child Education Planning using the 3 basic ways (1 traditional saving and 2 insurance policies) but this time I am targeting the Children Development Account and how it actually helps to save for your Children Education.

All children born on or after 17 August 2008 will also enjoy Government contributions in the form of a dollar-for-dollar matching for the amount of savings contribute to the child’s Children Development Account (CDA). This account earn a nice interest of 1% pa!

Not only is a CDA account earning good saving interest, with the dollar-for-dollar matching by the government that mean you are actually earning double the interest you are suppose to. I know many of you at this point will say that you already know this and how the CDA can be used to pay pay fees for all your children who are attending Approved Institutions registered with MCYS under the Baby Bonus Scheme and also be used to purchase MediShield or Medisave-approved private integrated plans for all your children and pay for all your children’s medical-related expenses. But how can it helps their Post Secondary Education since that is where the main education are!

A fact that many do not know is that after on 31 December of the year of your child’s 6th birthday, the CDA will be closed and the funds will be transferred automatically to the child’s Post Secondary Education Account (PSEA) held with the Ministry of Education (MOE) if the child was born from 2008 onwards. If the child is born between 2001 to 2007, MCYS will write to you offering you the option to credit the CDA funds to any nominated account you may have with any bank. With the funds in the PSEA, your child will be able to use this money for their Post Education Needs.

What this mean is that if you are not comfortable doing investment or buying a life insurance policy to save for your child education and saving is what you do best, then why not save into your child CDA and enjoy higher interest than normal saving account as well as the government dollar-for-dollar matching.