The Smartest Way To Fund Your Child’s Future

Child in graduate uniform writing some formulas

The rising costs of child education in Australia are a major concern for many families. While living expenses continue to increase so too does the pressure placed on young families who are hoping that they can put their children through schooling and university.

More and more often we are seeing clients who have young children, who want information on how they can plan ahead to provide a great future for their children. Similarly, we also have a large number of grandparents enquiring how they can contribute to their grandchildren’s futures. Recent reports claim it could cost $500,000 to privately education a child born in 2018. How will you be placed to provide for their future years’ education?

One of the smartest ways you can ensure your child has a great start is to consider Education Investment Bonds. These offer a smart way to provide for your child or grandchild’s future, offer tax-effective incentives and have many benefits over regular savings accounts. Let’s take a closer look at Education Investment Bonds and their benefits:

What are Education Investment Bonds?

These are designed for parents, grandparents or family wanting to establish a tax-effective investment for a child’ future financial needs. These can be used towards education or study expenses, a first home deposit, purchasing a car and even overseas travel.

How Can I Set Up An Education Investment Bond?

An Education Investment Bond can be established for anyone under the age of 16 years. Ownership of the Education Investment Bond can be transferred to the nominated person when they reach a specific age (up to 25 years).

What are the benefits of Education Investment Bonds?

The benefit is that there is no personal income tax on your investment during the term of the Education Investment Bond. There are no personal taxes on withdrawals after 10 years, no stamp duty, no additional fees or charges.

How are Education Investment Bonds Controlled?

You have complete control over when and how the child can access their funds. You can change the age or access the investment at any time, including making withdrawals as required. You are able to also establish an annual withdrawal limit once the vesting age is reached. Until the child is granted access, you retain full control and flexibility.

The gift of education is one of the greatest gifts you can provide to any child. Given the right opportunities, our future generations will be the key to longevity and success. Education bonds are normally used for future education, but as you can see these can be used for other purposes in life.

Just imagine being able to provide such a gift! If you start early enough you will have time on your side. To find out more about Education Investment Bonds, your trusted Financial Planner can assist to determine the best option for your family’s future.

Note: This article discusses an Education Investment Bond which is also known as a Child Advancement Policy.

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