Wazua
»
Market
»
Review
»
ICEA education Policy vs Fixed deposit
Rank: Member Joined: 10/14/2009 Posts: 2
|
Education policy vs fixed deposit...just wondering which is the better option...
if the option is to get a fixed deposit....which bank offers good interest rates for fixed deposit
See below a quote i got from ICEA education policy...
2 plans running concurrently for high school and campus education.
one to mature when the child is joining form one and to pay every year till the child clears form 4,and the other now to mature when the child is joining campus and to pay cheques every year till the child clears form 4.now minimum premium per policy plan is ksh4000.so that will require a total premium of ksh 8000.
Then to keep up with inflation and rising school fees you need to be increasing the premium every year by at least 10%,escalation factor.so if this year your premium is 8000,next year its 8800,year 3 is 9600,year 4 its10,648 then year 5 its 11712.
5th year,policy 1 matures at this point so you are left with one plan but you proceed with it at that premium level,so that it generates enough money to pay for campus since that is quite high.it matures the 8th year
Help me make this decision .......
Thanks
|
|
|
Rank: Member Joined: 8/29/2008 Posts: 571
|
Or if you have 500k,buy a forthcoming govt infrastructure bond for maybe 15 years and you are all set.Re-invest the interest paid every six months.......
Ali Baba
|
|
|
Rank: Member Joined: 9/9/2009 Posts: 53
|
Prosnl advice from ins ind pls always think security while taking cover so do all other invstmnts but have a policy for security they are not substitudes unless u are certain of when ur life may end or any unftnt ocrnce eg acc.
Dignityis everything keep it intact
|
|
|
Rank: Elder Joined: 11/19/2008 Posts: 1,267
|
Oteve...say that again .......in English..... Rules of the game here: Before you post anything think.give facts only..It's a serious blog for serious people....Do not insult your brother....respect one another...Just be good.... It's good to live a honest life....life without guilt.... Jeremiah 17:11 As a partridge that hatches eggs which it has not laid,So is he who makes a fortune,but unjustly; In the midst of his days it will forsake him,And in the end he will be a fool.' From the SK Anti-hate/anti- corruption campaigner.. Isaiah 65:17-Look! I am creating new heavens and a new earth, and no one will even think about the old ones anymore
|
|
|
Rank: Elder Joined: 6/27/2008 Posts: 4,114
|
@Crl: The 'I' in ICEA stands for INSURANCE,not investment. So if you want insurance,go for the ICEA plan; but if you are looking for investment,go the fixed deposit rout. Insurance and investment serve different purposes. In insurance you inject small amounts over an agreed duration of time,at the end of which you get the agreed return. If you die at any point AFTER signing the agreement,your beneficiary will still get the full matured sum at the end of the egreed period...even if you are knocked dead by a car when leaving the insurance company's office after signing the first cheque!!!! In Fixeddeposit investment,you only get the principal invested plus interest earned as at the point when you withdraw your money. Now decide what you want: investment or insurance Behind the gardens...Behind the wall...Under the tree (Including: Red...Dark Blue...Yellow) Nothing is real unless it can be named; nothing has value unless it can be sold; money is worthless unless you spend it.
|
|
|
Rank: Elder Joined: 11/19/2008 Posts: 1,267
|
Invest these premiums consistently in blue chip companies eg KCB ....Equity ...EABL...for the said period ....You will in no doubt have more than enough fees for your kids ......Just set up a standing order from your bank to your CDS account ...have A CDS in a bank affiliated broker for security purposes........ and also ask the broker to be purchasing the the selected shares once the money hit the account....... Then take a cheap pure life insurance ..... just incase you kick the bucket before your kids get to where you want....educationwise.... Hope this helps ..... Rules of the game here: Before you post anything think.give facts only..It's a serious blog for serious people....Do not insult your brother....respect one another...Just be good.... It's good to live a honest life....life without guilt.... Jeremiah 17:11 As a partridge that hatches eggs which it has not laid,So is he who makes a fortune,but unjustly; In the midst of his days it will forsake him,And in the end he will be a fool.' From the SK Anti-hate/anti- corruption campaigner.. Isaiah 65:17-Look! I am creating new heavens and a new earth, and no one will even think about the old ones anymore
|
|
|
Rank: Elder Joined: 6/27/2008 Posts: 4,114
|
Furthermore..... In an insurance policy,the escallation principle is a falacy!!! Inflation is taken care of by the interest earned plus so-called bonuses. For an education policy,the 'sum-assured' should be equal to the present day total fees [for the whole programme - e.g.,cost of Form 1 to 4] of the [kind of] school that you wish your child to attend in the future. The truth is that school do not increase by very big amounts. Real example: for years ago my son started in a private school whose fee were sh18k per term. My daughter will go to the same school next year and fee is now sh21k. This works to 4% pa; and this is a good school with very high demand! I am yet to see an educational institution whose fees have been increasing at an average of 10%pa over the last 10 years. Behind the gardens...Behind the wall...Under the tree (Including: Red...Dark Blue...Yellow) Nothing is real unless it can be named; nothing has value unless it can be sold; money is worthless unless you spend it.
|
|
|
Rank: Veteran Joined: 10/6/2007 Posts: 1,177 Location: Nairobi - Kenya
|
@mukiha i second you. kenyans are continually getting ployed by rogue insurance firms who have realized that most of us are honestly willing to do anything that safeguards our family's future.. lets be very carefully & seek informed advices when signing these products... When you run so fast to get somewhere,you miss the fun of getting there... Life is not a race,so take it slowly.... When you hear what I say, you will not understand. When you see what I do, you will not comprehend
|
|
|
Rank: Elder Joined: 6/27/2008 Posts: 4,114
|
If you decide to go the fixed deposit route,talk ti I&M bank about their 'Recurring Deposit' account....but don't expect big returns with any fixed deposit account...you will be much better off keeping the 8k per month for 6months and then buying the KenGen PIB from the secondary market Behind the gardens...Behind the wall...Under the tree (Including: Red...Dark Blue...Yellow) Nothing is real unless it can be named; nothing has value unless it can be sold; money is worthless unless you spend it.
|
|
|
Rank: Veteran Joined: 10/6/2007 Posts: 1,177 Location: Nairobi - Kenya
|
@ crl if you need to go the fixed deposit way,last week i visited several banks to find out which offered the best rates and of all i visited Co-op bank rocked.. as for std. chartered don't dare... When you run so fast to get somewhere,you miss the fun of getting there... Life is not a race,so take it slowly.... When you hear what I say, you will not understand. When you see what I do, you will not comprehend
|
|
|
Rank: Elder Joined: 12/13/2006 Posts: 2,589
|
Most money market funds offer better return than banks for similar principal investment e.g. you'll not get 8% p.a. from any bank for 100k but money market funds offer such return. smano BEER IS LIVING PROOF THAT GOD LOVES US AND WANTS US TO BE HAPPY!
|
|
|
Rank: Member Joined: 10/11/2007 Posts: 213
|
@ smano.. what about the fixed management fees and othe levies on entry/withdrawal
Me first,U next
|
|
|
Rank: Member Joined: 8/29/2008 Posts: 571
|
WARIA
Let answer for my friend SMANO.Don't invest in those funds/unit trusts.Invest directly with CBK and there are no charges(except taxation or if you sell before maturity).You can get more than10% currently.
Ali Baba
|
|
|
Rank: Elder Joined: 6/27/2008 Posts: 4,114
|
Two things to bear in mind: The rates quoted by Money Market Unit Trusts are NET; i.e.,after deduction of management fees. CBK bonds come in units of sh100k....so you cannot invest 8k per month here...you'd have to save the cash for a year first to accumulate the 100k Behind the gardens...Behind the wall...Under the tree (Including: Red...Dark Blue...Yellow) Nothing is real unless it can be named; nothing has value unless it can be sold; money is worthless unless you spend it.
|
|
|
Rank: Member Joined: 9/9/2009 Posts: 53
|
Fundaah I said it in english and I repeat it in english Insurance buys security Investment buys returns get it thru ur ... head two distinct products mulisoma wapi?
Dignityis everything keep it intact
|
|
|
Rank: Member Joined: 8/29/2008 Posts: 571
|
MUKIHA
Don't frighten our prospective CBK bonds investor.CBK bonds are sold in multiples of shs.50,000 and are discounted in most cases.This means you pay the principle less interest,then add back taxes.Treasury bills are the ones which are sold with minimum investment of shs 100,000.
Ali Baba
|
|
|
Rank: Member Joined: 8/29/2008 Posts: 571
|
OTEVE,
You maybe right.But if you have enough money to do your thing,you don't need insurance.
Ali Baba
|
|
|
Rank: Elder Joined: 6/27/2008 Posts: 4,114
|
@Ali Baba; I stand coLLected. Thank for pointing that out. I'd forgotten they lowered the threshhold for bonds [from 100k to 50k]...and also for bills [from1m to 100k] Behind the gardens...Behind the wall...Under the tree (Including: Red...Dark Blue...Yellow) Nothing is real unless it can be named; nothing has value unless it can be sold; money is worthless unless you spend it.
|
|
|
Rank: Member Joined: 10/14/2009 Posts: 2
|
Thanks everyone for responding back....
what i want to end up with ...is an option that will provide security and returns after a certain period of time....bearing in mind i want this to pay fees in the next 4 years....
what if i have the 100K to go the option i choose.... which route is better....at this point i have dropped the Fixed deposit option...
The CBK bonds seems interesting..but i don't know much about this...what the minimum term you can invest on this....and the return %....any idea....
Can anyone explains to me about this ....
|
|
|
Rank: Member Joined: 8/29/2008 Posts: 571
|
CRL
CBK bonds were sold in the recent past for minimum period of one year.However,with the entry of One year treasury bills,they(one yr) bonds are unlikely scenario now.They are advertised each month by CBK in the press /or you can get a prospectus from them or their website.If you want to pay fees after four years,just wait for a bond of about two-three years tenor and invest.Their interests vary depending on prevailing market rates.The current bond is a 15 yrs one with 12.5% interest ....and it can get higher sometimes....Keep checking the CBK website (Treasury bonds prospectus/results) until you see the bond you are interested in.
Ali Baba
|
|
|
Wazua
»
Market
»
Review
»
ICEA education Policy vs Fixed deposit
Forum Jump
You cannot post new topics in this forum.
You cannot reply to topics in this forum.
You cannot delete your posts in this forum.
You cannot edit your posts in this forum.
You cannot create polls in this forum.
You cannot vote in polls in this forum.
|