Welcome to the Reserve Bank of Fiji’s Public Awareness column. This article continues the series of articles on financial education in Fiji and how it contributes to financial inclusion.
Eight-year-old Paul Caginivalu, a Year 3 student at Assemblies of God Primary School in Nasinu, started collecting his savings in money boxes while in kindergarten. Two years ago, Paul used his savings to open an account with Unit Trust of Fiji (UTOF), a government-owned investment company. Today, he is the proud owner of 1,161 units. Paul says he wanted to put his money into units because they’re a safe place to put money and to watch it grow. He has asked to have the income he earns from the units, called dividends, to be reinvested regularly with his main savings.
UTOF has a Children Investment Plan (CIP), which allows school children under 18 years old to buy units at a fixed value of $1 per unit with a minimum investment of 20 units. These units are placed in the Trust’s Income Investment Fund earning income through capital investments in domestic companies in a variety of sectors. Investments are held in trust until the child turns 18. In July 2016, there were a total of 3,228 school children enrolled in the plan, with the highest amount invested being approximately $10,000. In 2015, UTOF paid out an annual return on the CIP of 3.28 percent in tax free dividends.