Explore Education Bonds for a Bright Financial Future

The Futurity Investment Group Cost of Education Index revealed that it costs a staggering $357,931 to send a child to an independent school in Sydney.

Education Bonds are a special type of investment that come with unique advantages. They combine tax benefits, flexible investment options, and the ability to pass on wealth to your loved ones. These bonds are designed to help you not only save for education expenses but also address various financial needs.

Basic Features

Just like Investment Bonds, Education Bonds offer tax advantages and are built on investment linked life insurance contracts. Some key features they share include:

  • You can invest a lump sum or regularly.
  • The taxes you pay on them are capped at a maximum rate of 30%, benefiting those on higher marginal tax rates.
  • You can switch between investment options at any time.
  • If the last insured person passes away, the beneficiaries receive the proceeds tax-free.

Unique Structure of Education Bonds

What sets Education Bonds apart is their flexibility. These bonds have two parts: capital and earnings components. This allows you to withdraw your money anytime from day one without triggering taxes. This flexibility is beyond what traditional investment bonds or superannuation offer.

Valuable Education Tax Benefit

Education Bonds also offer a great tax benefit for education-related expenses as earnings are taxed within the bond itself at a maximum rate of 30%. Funds that are withdrawn to fund educational expenses of a minor are not subject to any additional tax.

Multiple Beneficiaries

You can even appoint multiple beneficiaries under a single Education Bond, catering to the education needs of your whole family. This eliminates the need for separate bonds, helping you save on fees and optimise your investments.

Wealth Transfer with Bond Guardian Feature

Education Bonds aren’t just for education costs; they also offer estate planning benefits. You can designate beneficiaries to receive bond benefits tax-free upon your passing. Plus, appointing a Bond Guardian ensures your wishes are followed even when you’re not around.

Whether you’re saving for education, wanting to support your grandchildren, or looking for a smart investment strategy, Education Bonds could be the answer. To find out more, please download this White Paper, it includes some case studies.

If education bonds are something that interests you, please do not hesitate to contact us.

Kind Regards
The ST Wealth Team