State education savings system provides broader access to education

ASTANA – Kazakh citizens planning for their children’s college educations can begin putting money away from the time the youngsters can crawl.

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The state education savings system ensures higher education accessibility by allowing residents to save under favourable terms.

Established in 2005, the centre provides a financial instrument to expand access to education. The nation was the first in the Commonwealth of Independent States (CIS) to implement such a programme, similar to those available in Europe, South-East Asia and the U.S.

“The state education savings system is an opportunity to put money aside for tuition fees long before university entrance and save a significant amount by benefiting from high interest rates. It is of particular importance nowadays, since parents can put aside money for their children’s education from the time of their birth or young people can save up for a master’s degree,” said Financial Centre President Askar Ibraimov, according to

While regular bank deposits earn 14 percent interest, the system provides an additional annual state bonus of 5-7 percent with the opportunity to increase participation.

The system is quite flexible. For example, if parents have saved only half of the amount needed to cover tuition fees, they may take a bank loan to cover the outstanding amount.

“If a student receives a state scholarship, then the centre allows withdrawing all the funds and accumulated interest, transfer it to an account of another saver or continue saving for another degree,” he added.

The savings are safe, as the Kazakhstan Deposit Insurance Fund guarantees payout to depositors on accounts up to 10 million tenge (US$29,850). Moreover, state bonuses are not subject to tax deductions.

The accounts are denominated in tenge since the system is a national programme. All salaries and tuition fees are also paid in tenge.

“As of today, 18,000 people have savings accounts for 13 billion tenge (US$38 million) and state bonuses of 1.6 billion tenge (US$4.78 million) have been paid,” said Ibraimov.

To participate in the programme, an individual must open an educational savings account at any partner bank with an initial deposit of three monthly calculation index (MCI) of 2,405 tenge (US$7.20). The partners include Bank VTB, Halyk Bank, Nurbank and Tsesnabank.

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