Higher education in Brazil is mainly provided by private educational institutions. According to the higher education census published on the 10th by the Ministry of Education and Inep, only 321 out of a total of 2,595 universities in Brazil are public, and 95% of the vacancies filled in 2022 were offered by private institutions. In this context, investing plays an important role in saving the necessary money.
One option available to Brazilians interested in investing in their children’s education was launched this year by the National Treasury: Treasury Educa+. Responsible individuals can invest in safety until the child or teen enters college or technical training.
When the paper matures, the investment is repaid in monthly payments over five years, adjusted for inflation and compounded interest, which today exceeds 6% per year.
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In addition to the investment time, early childhood programs benefit from compound interest in Educa+, so monthly payments are even lower. “Over time, interest is accrued not only on the initial amount of investment, but also on the already accumulated interest, which leads to an exponential growth of the investment,” explains Gianluca Di Mattino, investment analyst at Hike Capital.
According to Grupo +A Educação’s Desafios da Educação platform, citing data monitored by Educa Insights, in 2022 undergraduate courses in Brazil registered an average of less than 500 reais. So 1,000 Brazilian reais is still enough to cover the monthly fee.
Simulations on the Tesouro Direto website show that 150 reais per month is enough to guarantee an income of 1,000 reais for a child who is now one year old. The amount generally covers the costs of most undergraduate courses in Brazil. For a child who is now 10 years old, the required monthly contribution increases to R$419.75. The projections assume that the money will be used to pay for college or technical courses from the age of 18.
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See the monthly contribution required for a guaranteed income of R$ 1000 at the age of 18:
Age | The name is specified | A monthly fee is required |
1 | Educa+ 2041 Treasury | R$ 150.03 |
5 | Educa+ 2037 Treasury | R$ 223.10 |
10 | Educa+ 2032 Treasury | 419.75 R$ |
15 | Educa+ 2027 Treasury | 1230.95 R$ |
Source: Tesouro Direto
New to the market, Educa+ Treasuries offer a reward superior to traditional inflation bonds, IPCA+ Treasuries and IPCA+ Semiannual Interest Treasuries. This profitability is affected by several factors, such as a country’s monetary policy, inflation, global events – such as conflicts and health crises – and investors’ expectations of
“The interaction of these factors will determine whether real incomes will fall or rise in the coming months,” explains Di Mattina. The analyst also says that “it is important to monitor economic indicators, monetary policy decisions and global events to have a clearer picture of future trends.”
How much do you need to apply to pay for the R$500 course
For the cheapest monthly payments, such as distance learning courses, the minimum investment is R $ 75.06 over 17 years to reach an income of R $ 500. But those who have less time need to invest more: R $ 615.90 per month to reach the goal of three years.
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See the monthly contribution required for a guaranteed income of R$ 500 at the age of 18:
Age | The name is specified | A monthly fee is required |
1 | Educa+ 2041 Treasury | R$ 75.06 |
5 | Educa+ 2037 Treasury | R$ 111.63 |
10 | Educa+ 2032 Treasury | 210.15 R$ |
15 | Educa+ 2027 Treasury | 615.90 R$ |
Source: Tesouro Direto
First-class courses
For more expensive colleges, the monthly fee is 5,000 reais, the required monthly contribution increases to at least 750.05 reais. Many medical courses, for example, have a monthly fee of more than 5,000 reais, but the extra income will at least support you during your years of study.
Check the monthly contribution required for a guaranteed income of R$ 5000 at the age of 18:
Age | The name is specified | A monthly fee is required |
1 | Educa+ 2041 Treasury | 750.05 R$ |
5 | Educa+ 2037 Treasury | 1115.38 R$ |
10 | Educa+ 2032 Treasury | 2099.78 R$ |
15 | Educa+ 2027 Treasury | 6153.93 R$ |
Source: Tesouro Direto
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Taxes and other costs
It is important to note that the Treasury’s modeling does not take into account two costs: income tax and storage fees.
IR has a rate that varies depending on the investment period:
- 15% for investments of two or more;
- 17.5% for applications from one to two years;
- 20% for deposits from six months to one year;
- 22.5% for shorter investments, up to six months.
Because the simulation considers monthly investments, the investments assume different income tax ranges. The first installments will take longer to pay off, so they will be taxed at a rate of 15%. The latter investment should pay 22.5% IR.
Another fee that is not yet on the bill is the custody fee charged by B3. This is exempted for those who hold bonds to maturity and will receive a monthly income of up to four minimum wages from the invested money. Anyone over the limit must pay a 0.10% fee on only the portion over the limit.
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