If you have children, you know that people keep telling you to begin saving for their future university fees. It doesn’t matter if you don’t believe in traditional definitions of academic success; your kids are going to need a degree.
You would have also read that this degree is going to cost a lot of money. It doesn’t matter if you’re looking at a private institution or a public university; fees are increasing across the board. The Malay Mail reported in 2014 that at least one private university was increasing fees by 10% annually while generally, double-digit increases in fees over five years is not uncommon.
Most of us aren’t made of money and will likely have to save for many years to put our kids through university. At the rate things are going, this means that we need to be saving from the moment that the child is born.
Enter PTPTN’s Skim Simpanan Pendidikan Nasional (SSPN-i)
What is it?
SSPN-i should be a familiar subject for those who took a PTPTN loan back after 2012. It’s generally known as a type bank account for loan holders. Many banks (such as Maybank, Agro Bank, and RHB) offer the SSPN-i account as a product, and PTPTN will only deposit loan funds into these kinds of accounts.
As the “-i” suffix implies, this is a Syariah compliant product.
More importantly, an SSPN-i account is not only limited to those looking for a PTPTN loan. It can be opened at any time, and is designed to help new parents begin saving for the future. Since there is no minimum age, parents can open an SSPN-i savings account the moment their child enters the world.
Opening an account early is something that the national study loan body encourages. The annual 4% dividend ensures that the savings grow faster than that of regular savings accounts (which have interest rates of less than 3%). Meaning that your children may not even need a study loan in the future.
Additionally, PTPTN aims to encourage this early savings habit by providing a matching grant of up to RM500. The idea is that you start an SSPN-i account with up to RM500 and will receive a matching amount from the body.
But wait… That’s not all.
We wouldn’t need to talk about SSPN-i if it was only a PTPTN-driven savings account. That would be of no service to you. Instead, there’s a whole lot more available for those who are looking to start saving for their child’s future.
For instance, these savings are tax deductible; up to a value of RM6, 000 per year. If you have been looking for ways to pay less income tax, this would be it. As an extra benefit, the interest accrued from the SSPN-i accounts are also tax exempt.
Savings accounts that have deposited at least RM1, 000 come with Takaful protection for the owners. This comes at no extra charge and exists as long as the account remains active.
Consider even more saving benefits with SSPN-i Plus
Saving for the future is not as simple as dumping an amount of money into a bank account and forgetting about it for 18 years. We’re not saying that it can’t be done. It can. This is not that bad an idea, considering SSPN-i’s 4% interest rate.
On the other hand, you can treat it like a proper savings account. Stashing away a portion of your income each month, allowing it to accumulate over time. PTPTN will even help you in this effort with the SSPN-i Plus account.
Monthly contributions start from as low as RM30; although the exact amount will depend on the package provided by your bank. Either way, this will be a fixed amount and comes with expanded benefits.
For instance, the income tax relief is increased to RM12,000. The Takaful coverage is also increased to RM1 million for incidents of death or accidental injury. More importantly, this will also remind you to continuously save for the future of your child’s education.
Incentive to pay back, win cash prizes
Of course, the main reason for opening an SSPN-i account is to take a PTPTN study loan. Saving is useful, but you will likely want to top off that amount to cover any additional costs that arise from sending a child off to get a degree.
Getting people to pay back government loans, on the other hand, is something of a challenge. Which is why there are often discounts and incentives for borrowers to repay their loans ahead of time.
For instance, PTPTN borrowers that settle their entire loan amount before 31 December 2018 can do so at a 20% discount.
And one more thing
PTPTN is closing out 2018 with the final drawing of its Cabutan WOW! lucky draw. Here, SSPN-i Plus account holders stand to win attractive prizes. The December draw will send four lucky winners to either Disneyland Tokyo, or provide them with an Umrah package worth RM23,000. It’s up to the winners decide which they would rather have. There is also another Cabutan WOW! draw with a cash prize pool of RM960,000.
With all these benefits, it’s not difficult to see that the government is serious about convincing people to start saving if not for themselves, then for the future of their children. After all, children are the future, and you don’t want to mess up the future.