Answer: The best product to choose depends on the time frame you have to invest, as with most other investments. If your child is still very young, and you are saving for his or her tertiary education, you might have fifteen years' or more to invest. But if you only have two or three years, you will need a very different product.

The time period is important because investment returns are linked to risk. Everybody needs to risk something, in order to get a reward. Even saving money in a bank comes at a risk because - although it's very unlikely - the bank could go under. Because this risk is very low, your return is also low and seldom or never beats inflation.

Look at unit trusts

If you are able to invest for five years or more, I would suggest you look at unit trusts. This is a very popular way of investing, as you only need a small amount to begin with, and you still have exposure to the equity market. Over time, equities have consistently been the best-performing asset class. Another advantage of unit trusts is that they are highly liquid, so you can buy or sell whenever you need to.

Start with a general domestic equity fund before specialising further. Everyone needs some diversification, and a general fund will give you general exposure. Keep an eye on the costs, as this will affect your returns, but once you're invested don't be tempted to switch funds too often, as this will also incur a fee.

Remember that with unit trusts, past performance there's no guarantee of future performance. Markets are cyclical, and what goes down does eventually come up, so don't let this scare you away.

If you have less time...

If you have less than five years in which to save, I would recommend a more secure investment. This is because if the market dips, you may not be invested for long enough to see the recovery. Look at fixed deposits, money markets and other products which offer lower levels of risk.

Endowment policies are another popular option for education funds. However, these products are often sold on the basis of inflated projected returns, which are seldom met. In any case, an endowment policy simply invests in the markets on your behalf, and charges a fee for doing so. With unit trusts, you have greater flexibility and fewer costs.

Have a goal in mind

Old Mutual estimates that a three-year commerce degree will cost R87 225, while a six-year medicine course will cost over R220 000. If you have an idea of how much you'll need, you'll find it that much easier to work out whether your savings are on target.