8 Ways to Save for Your Children Education Fund
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8 Ways to Save for Your Children Education Fund

This article was first published on the 7th of April 2019 and has been updated on the 10th of January 2022.

In the more recent years, the state of the economy has been fluctuating in an unprecedented manner that it has become even more important to have a steady amount of savings, especially for your children education fund. This is to ensure that you and your family’s wellbeing are protected not only in the present, but also in the future.

We are quite fortunate as a nation where public schools have been made accessible to many, even to those in the lower income levels. The problem however, arises when speaking of higher education. Although student loans, subsidies and scholarships do exist, it is undeniable that higher education is a costly investment, especially when striving for overseas education. 

Therefore, it is wise for parents to start saving for their children’s future early on. This is also a good practice for parents to teach children on the importance of saving money, which is an essential financial skill that will undoubtedly benefit everyone. 

Having said that, let us dive into the several options available in Malaysia for parents to save for their children’s education, slowly but steadily.

1. Savings Account

Tips to select the most suitable bank to open a child’s savings account with:

  • Bank location: Select a nearby location, or choose the same bank as preferred by the parent(s).
  • Fees and requirements: Choose an account that does not charge a monthly maintenance fee or require a minimum balance. Avoid banks that charge a fee for inactive accounts and carefully read every term and condition before opening an account.
  • Type of savings account: If the parent/parents’ preferred bank does not offer accounts that are suited for children in terms of its fees and requirements, check with your local credit union. Credit unions usually charge lower fees as they are member-owned.
  • Age requirements: Based on the child/children’s age, there may be different needs for the savings account. Consider what will the savings account be used for when choosing the bank and type of account to be opened.
  • Special benefits: Ask if there are any special programs for children at your preferred bank. These may be beneficial for your children.
  • Interest rate: Do not forget to check for the interest offered on the account as this will differ across banks.


  • This account type is very easy to open (according to each bank’s policy, might only need as low as RM1 to open an account)
  • Savings accounts offer interest that will be paid to the depositor. Although this interest is quite low, it still allows for the savings to grow, rather than saving traditionally at home.
  • Can be withdrawn any time. This is useful for times of emergencies. Some accounts also offer issue debit cards that can allow any transactions to be monitored online.
  • The safety of your deposit is guaranteed. For every bank that is registered with PIDM, all savings are protected and insured for free (up to RM100,00 for each account). Therefore, make sure that you only conduct transactions with registered institutions.


  • Offers lower interest than other saving methods.
  • Your children may be tempted to withdraw their money prematurely, especially if they own access to the account.

2. Amanah Saham Bumiputera 3-Didik

For all Bumiputeras, opening an Amanah Saham Bumiputera 3-Didik account is a savings plan that could benefit your children. You can open an account for as little as RM100.

Since its launch in 2001, the dividends have never dropped below 6%. If your child is between 6 months to 18 years of age, you can open an ‘Akaun Bijak’ on behalf of your child.

This account can be converted to an adult account when your child grows older­­. The fund is managed by Amanah Saham Nasional Berhad, a wholly-owned subsidiary company of Permodalan Nasional Berhad.

3. Fixed deposit accounts


Consider investing in Shariah-compliant fixed deposit accounts for more significant returns.

This way, not only can you earn returns on your principal, you can also set aside an amount for your emergency fundMany local banks now offer Shariah-compliant fixed deposits.

Of course, selecting the bank to open this investment account with is not easy. You will have to carefully survey and compare the terms and conditions, and choose the one that best aligns with your needs and will offer you the best returns.

4. Tabung Haji

For Muslim Malaysian citizens, this can be a valuable offer. Once the savings in your child’s Tabung Haji reaches RM1,300, which is the minimum amount required for registering for pilgrimage under this subsidised scheme, you can register their name to be in the queue for pilgrimage. 

Some of the benefits of saving in this fund is that all deposits are 100% insured by the government, eligible for tax exemption, and are automatically deducted for zakat payments.

There is also no limit to the amount of deposit and Syariah-compliant.

5. SSPN-i Plus

The National Higher Education Fund Corporation (PTPTN) introduced its savings scheme in 2012, SSPN-i Plus. The plan is basically an education savings plan attached with Takaful life coverage.

The dividend declared for 2018 was 4%, which is higher than most fixed deposit accounts.

In addition, you can claim up to RM6,000 in tax relief for the scheme, and an additional RM6000 for life insurance coverage, if you have not already exhausted that with tax reliefs from your own EPF or life insurance coverage.

6. Amanah Hartanah Bumiputera (AHB)

This is a Syariah-compliant unit trust fund that invests primarily in commercial properties in prime locations within Malaysia. It is aimed to provide positive and consistent income flow to Bumiputera investors.

This fund also offers a junior account option for children aged 3 months to 18 years registered under a legal guardian’s name.

This means that you can start investing in property for your children with a minimum investment as low as RM100. Property investment can earn lucrative rewards, especially after investing for a long time.

It is also affordable, with a fixed unit price of RM1.00.

The downsides of AHB are limited unit availability, returns that are not reinvested, limited agents and only open to Bumiputera citizens. 

7. Unit trust

For the non-Bumiputeras, fret not! Consider investing in education planning programmes. These are generally funds that are of low to moderate risk, as they are long-term in nature. Shop around different fund providers and select a fund that fits your risk appetite, providing a satisfactory return.

With as low as RM1,000, you can invest in Amanah Saham Nasional Berhad (ASNB) and can earn consistent dividends. This is a good option for beginner investors.

Be sure to properly read the product prospectus, a document that contains all the important details regarding the investment that you are intending to make. You can invest in ASNB through commercial banks such as Maybank, RHB and CIMB.

There are also newer investment platforms to try, such as StashAway, HelloGold and MYTHEO. These platforms are designed to be accessible to users, even for beginner investors, and can help manage your investment with low management fees. Most importantly, they are mobile application-based and therefore very convenient yet safe for investors.

8. Tips to Teach Your Kids About Saving Money

i. Start them young

Financial education needs to be given early. Children should understand the true value, purpose and management of money. This can actually save people from committing major money mistakes when they grow older. 

It is also good to let them know of your savings plan for them. It is also more than fine to do it little by little. Say you save RM275 since your child is born, the amount will grow up to RM82,500 once they reach the age of 25. This is not yet taking into account of dividends and their own incomes.

Whether the savings are in regular savings accounts or in specialised education funds, it is worth explaining to them how the savings works and and how it will grow.

ii. Teach them to earn

Children should also be taught that money does not grow on trees. They should know that money is earned through work. 

Parents can teach them this by making them run small errands around the house, such as tidying up their rooms or watering the plants.

You can also incentivise them to do well in school by giving them some cash reward for good work. This can be added to their school allowances.

However, parents must execute this well in order to not make them misunderstand that they will get money for every single task done.

 iii. Cultivate healthy spending habits

Besides that, it is wise to teach children to spend wisely.

Demonstrate to children that in order to gain something that they want, they should save for it instead of splurging.

Saving money can also be taught through other methods, such as teaching them to save electricity by turning off appliances when not in use, or save water. Teach them that saving on expenses, such as utility bills, is also a way to save money.

iv. Educate them on loans

You can teach children on loans by making them take ‘informal’ loans from you. Say they want to make a big purchase, you can pay ahead and agree to let them repay you little by little over some time.

This can teach them the concept of borrowing and also teach them responsibility and accountability.

Explain to them that not paying back can cause them repercussions. They should also be taught to only borrow when there is a valid reason to, instead of loaning any time they want to.

v. Educate them on investment

Lastly, children can be taught the concept of investment, where money can be grown over time. Teach them the importance of long-term investment to prepare for the future.


The COVID-19 pandemic is a great lesson for us to realise the importance of saving money. ‘Normal life’ can be turned around massively in a matter of days, all the more reason for us to start saving for emergencies. 

Improving the financial literacy of all family members is a learning process but it can really pay off in terms of maintaining everyone’s wellbeing. Continue the effort to maintain the family’s financial situation by learning more on the best platforms to save up for retirement. As the Malay proverb goes: “Sikit-sikit lama-lama jadi bukit.”

This article is prepared by Direct Lending – a fast, simple and safe online personal loan platform for civil servants and private workers in Malaysia. Let us help you to solve your financial struggles by offering 100% free consultation service. No hidden cost or upfront payment needed. We can help you to source the best personal loan deals in town. Loan approval as fast as 2 working days.

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