fund-linked savings plan to help Bermuda residents pay for the cost of post-secondary education.

The Emerald Educational Savings Plan is competing locally with the Heritage International Scholarship Trust Fund and the Canadian Scholarship Trust Plan.

But unlike its two rivals, which invest in fixed-rate investments, like Government bonds, the EESP allows clients to invest in stocks.

Mr. David Bolden, who runs the plan, said that low interest rates around the world had prompted a rethink of how best to save for education.

Government bonds, which are risk-free investments, are offering less attractive returns in the current global economic climate, he said.

"Returns from bonds will be much lower than they have been over the last five to ten years,'' said Mr. Bolden.

With the cost of going to college increasing by between eight to ten percent annually, parents might find mutual funds more attractive, he said.

"People need to look at a new way of funding post-secondary school costs,'' he added.

"A large percentage of people in the US and Canada are using mutual funds to meet their financial goals. I believe Bermudians will do so too.'' The Emerald Educational Savings Plan offers clients the chance to invest in over 250 overseas mutual funds in US and Canadian dollars and UK sterling.

Among these are the Canadian International Pacific Fund, which has an average annual return of 18.9 percent since it began in 1981, and the Templeton Growth Fund, whose return averages 15.3 percent since 1954.

Like the Heritage International and Canadian Scholarship plans and insurance schemes, EESP is exempt from Bermuda's ten percent foreign currency investment tax.

Mr. Bolden said his scheme was more flexible than rival products in that it did not obligate clients to pay fixed amounts.

"They can increase or decrease the amount they choose to invest at any time as long as they meet the standard $50 minimum,'' he said.

"Clients have the flexibility to use the service just when they need it, activating it one month and suspending it the next.'' He added: "Another advantage is that clients can pick where they want their money to be invested, with the help of professional consultants.

"They will be able to create a portfolio according to their requirements.'' He pointed out that clients had 40 years to use their money for education purposes, allowing them to use it for someone of another generation if the intended recipient does not go to college.

"The risk of loss of capital is virtually non-existent,'' said Mr. Bolden.

"This is not the case with other plans.'' There is no age restriction on the beneficiary of the Emerald Plan, making it suitable for adult students who plan to go back to college to take their Masters degree, he said.

"The other plans are really designed for children,'' he said.