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How to save up for a child's college or university education with the government’s help

SESS is an opportunity for any Kazakhstani to save enough money for their child’s vocational and higher education locally or abroad, the press service of the Agency of the Republic of Kazakhstan for Regulation and Development of the Financial Market (ARDFM) reported.
How to save up for a child's college or university education with the government’s help

Four second-tier banks participate in the SESS program at the moment, 22 thousand educational deposits have been opened for a total amount of around 33.5 billion tenge.

The alternative sales channel for this investment product will now be offered by insurance organizations along with banks. By signing an educational endowment life insurance contract within the SESS framework, parents will be able to save up for their children’s education and, in addition to return on investment accrued by the insurance organization get a state bonus of 5% per annum (for a priority group of the population, for example, orphans, disabled people, children from large families - 7% annually).

The insurance product has a number of perks. Firstly, the rate of return is guaranteed for the entire duration of the insurance contract, in contrast to the deposit (from 8% to 10%). Secondly, the guarantee of Insurance Payment Guarantee Fund covers the full accumulated amount, while the Kazakhstan Deposit Insurance Fund only covers the amount of up to 20 million tenge. Thirdly, in case of a parent's disability or death, the full cost of education is paid, regardless of the accumulated amount.

The introduction of educational endowment insurance product will allow more parents to save money for education of their children; it is the first insurance product with a government subsidy.

Photos are from open sources.

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