I’m wondering if anyone has any experience – good or bad – with scholarship education savings funds? In particular the Australian Scholarships Group? I’m sitting on the fence, because I can’t really see where they’re a better savings plan than just investing money elsewhere. What’s the advantage if I know I can save the money anyway without help?

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  • I know when we started one of these for our son, it was going to take so many years of investing before we would start to see a profit. That put us right off

  • There’s probably o benefit if you’re confident you can save just as well else where. Might be handy to go elsewhere just in case the money doesn’t need to be used in the way originally intended

  • I think the high interest savings accounts give you better control over your own money.

  • always read the small print – my ex hubby did something like this fund, and there was so many conditions to it and all in the provider’s favour…

  • I just set up my kid bank accounts and transfer $30 a month over

  • Yeah, I checked out ASG as well. I don’t see any value from it besides the minimum potential tax benefit. A separated saving account will be my choice. Why do we want to let someone controlling our money?

  • yeah they really seem to push you into thinking that you can’t get by with out one

  • Thanks so much everyone for your answers. As we already have high interest savings account for our son, we’ve decided there really is no worth (for us) in having a scholarship fund as well.

  • Wow interesting comments. I had thought about a scholarship fund but after reading everyone’s feedback I would never consider them now.

  • My husband’s parents set one up for him as a child and the payout was minimal, it barely covered the books he needed each year. We have set up an education savings fund for our kids through Commbank instead.

  • There’s absolutely no advantage if you have the discipline to save money yourself.

  • Thanks for posting that question was interesting reading the answers of others as i have had calls from them too

  • I think that you have to be careful with these types of things and research it really thoroughly. Another option could be an online savings account which have pretty good interest rates.

  • I am not sure but we have a high interest saving account where we put money into for our daughters and when the time comes we will have money for their education.

  • I would not touch this sort of saving plan. Open a interest bearing account and add to it as you can control this account. When you kids decide to go to Uni there are Government programs where they pay later when they are earning lots of money. We put $10,000 per child away and it doubled in no time. I bet this Scholarships Group could no do this and if you child decides not to go to Uni how do you retrieve your money. I would steer clear!

  • Have you thought about just putting the extra money into a high interest savings account instead of a scholarship fund. Why do you need to have an external agency manage your funds? You can set up an account so that you can’t access the funds until you reach a target savings goal if that helps.

  • I personally don’t think it has any value. You would be better off putting money in an interest earning account. At least that way too, if anything should happen (god forbid) you would have a back up to access funds.

  • I don’t think they are a great idea. If your child doesn’t go on to further education and you do get your money back, how have you benefited from ‘investing’ any of that money? 0% return. You’d be better off putting money into a low interest saving account.

    A person suggested to me investment bonds for long term saving. Especially good for higher income earners as the tax is paid within the fund (company tax rate) and as long as you follow the requirements over a 10 year period, you then can withdraw the full amount tax free. I’ve set one up for each of my children (although they do have normal bank accounts too).

  • My kids both have one but to be honest I’m not sure on the benefits yet as they are still so young. I figured they would need something and the scholarship sounded good. And at worst I get everything I’ve paid back. But sorry not much help – but we were recommended by our accountant friends which is why we went for it.

  • That company called me once and it didn’t sound like there was much benefit. I think a savings account that you have control over it yourself. I read the previous post and was shocked that time off studies meant loss of payments.

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