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An endowment is an investment policy with a five-year term. It is structured using a Life license, which means your investment is taxed in the hands of the Life company and all the returns you receive are nett of tax. Endowments therefore offer notable tax advantages if you have an average marginal tax rate of 30% or more in South Africa.
Fedgroup’s range of Endowment investments allow you to capitalise on the inherent benefits associated with endowment vehicles and bring stability to the performance of your portfolios with access to underlying assets that have historically only been available to a select few, without sacrificing your peace of mind.
Fedgroup’s Endowments consist of a carefully selected combination of high-value assets generating a competitive return, structured under our Life license to offer you an unmatched investment product while benefitting from the regulated nature of the endowment structure.
An endowment investment allows you to contribute either a lump sum or recurring payments into a policy, which is then invested in a range of underlying portfolios such as unit trusts or funds structured within a life insurance wrapper.
To unlock the full tax benefits, your endowment policy must be held for a minimum of five years. Early access is restricted, typically permitting one withdrawal during the investment term. After the five-year term, full withdrawals are allowed within the limits of the regulation.
A single withdrawal is allowed during the five-year investment term. This is subject to maximums as below. A notice of one calendar month is required.
Period | Maximum withdrawal |
|---|---|
0 - 12 months | 10% |
13 - 24 months | 20% |
25 - 36 months | 30% |
37 - 48 months | 40% |
49 - 60 months | 50% |
An early withdrawal fee of 0.1% will be charged for every month remaining in the restriction period (initial five-year term).
The policy is taxed internally at fixed, favourable rates: 30% on interest, 12% on capital gains, and 20% on dividends (already withheld), which is significantly lower than the top marginal individual tax rates, making it especially tax-efficient for high-net-worth individuals.
In addition, the proceeds of the policy can be paid directly to nominated beneficiaries upon death, helping to bypass the estate, reduce executor’s fees, and potentially lower estate duty liability.
Essentially, it is a structured investment with built-in legacy planning benefits and represents one of the most tax-efficient investments in South Africa.
Besides the discipline of locking in long-term savings, Fedgroup Endowments are pure endowments that offer additional benefits thanks to our specialist asset management capabilities, giving us direct access to a range of underlying assets that deliver competitive returns and serve as an inflationary hedge.
Not exactly what you were looking for? Explore all our investment products.
Whether you are looking for an endowment investment with a market-beating fixed return, a linked endowment that offers stability alongside competitive returns, or something to provide a currency hedge, we have an endowment suited for you!
Fedgroup Endowment offerings are provided exclusively through financial advisors, so remember to speak to your advisor about the best product to suit your needs.
A fixed endowment as you would expect - with enhanced returns.
Steady growth and peace of mind
The Fedgroup Fixed Endowment allows you to capitalise on all the benefits of the traditional endowment structure while enjoying competitive, fixed returns.
Perfect for investors who are looking for a smooth, stable investment journey without sacrificing performance.
Here’s a quick snapshot of our endowment portfolios and the benefits of each of them.
Fact Sheet | Beneficiary nomination | Tax | Fact Sheet |
|---|---|---|---|
Endowment portfolio Fixed Endowment Suitable for HNW investors seeking competitive, fixed returns in regulated, tax-efficient structure Returns Fixed Estate planning Funds paid directly to nominated beneficiaries upon passing, no executor fees | Yes | Taxed at 30% in the hands of the Life company, returns are nett of tax | |
Endowment portfolio Impact Portfolio Suitable for HNW Investors seeking exposure to sustainable assets for diversification, inflation hedging, and competitive returns. Returns Linked Estate planning Funds paid directly to nominated beneficiaries upon passing, no executor fees | Yes | Taxed at 30% in the hands of the Life company, returns are nett of tax | |
Endowment portfolio Diversified Alternates Portfolio Suitable for HNW Investors seeking a diversified blend of traditional and alternative assets, to reduce risk, whilst maximising returns Returns Linked Estate planning Funds paid directly to nominated beneficiaries upon passing, no executor fees | Yes | Taxed at 30% in the hands of the Life company, returns are nett of tax | |
Endowment portfolio Enhanced Global Private Credit Portfolio Suitable for HNW Investors seeking global exposure in a hard currency, with asset-backed security and capital preservation. Returns Linked Estate planning Funds paid directly to nominated beneficiaries upon passing, no executor fees | Yes | Taxed at 30% in the hands of the Life company, returns are nett of tax |
Endowment portfolio
Fixed Endowment
Suitable for
HNW investors seeking competitive, fixed returns in regulated, tax-efficient structure
Returns
Fixed
Estate planning
Funds paid directly to nominated beneficiaries upon passing, no executor fees
Beneficiary nomination
Yes
Tax
Taxed at 30% in the hands of the Life company, returns are nett of tax
Endowment portfolio
Impact Portfolio
Suitable for
HNW Investors seeking exposure to sustainable assets for diversification, inflation hedging, and competitive returns.
Returns
Linked
Estate planning
Funds paid directly to nominated beneficiaries upon passing, no executor fees
Beneficiary nomination
Yes
Tax
Taxed at 30% in the hands of the Life company, returns are nett of tax
Endowment portfolio
Diversified Alternates Portfolio
Suitable for
HNW Investors seeking a diversified blend of traditional and alternative assets, to reduce risk, whilst maximising returns
Returns
Linked
Estate planning
Funds paid directly to nominated beneficiaries upon passing, no executor fees
Beneficiary nomination
Yes
Tax
Taxed at 30% in the hands of the Life company, returns are nett of tax
Endowment portfolio
Enhanced Global Private Credit Portfolio
Suitable for
HNW Investors seeking global exposure in a hard currency, with asset-backed security and capital preservation.
Returns
Linked
Estate planning
Funds paid directly to nominated beneficiaries upon passing, no executor fees
Beneficiary nomination
Yes
Tax
Taxed at 30% in the hands of the Life company, returns are nett of tax
Fedgroup Endowments are provided exclusively through financial advisors.
