A study fund is a medium-term savings instrument designed both for salaried employees and self-employed individuals. Study funds were originally intended to be used to subsidize professional training courses; however, it is presently used mostly as a general medium-term savings channel. Savers who deposit money in study funds are called “members.” Each member has a separate study fund account that records his deposits into the account, withdrawals from the account, the yield on their investment, and the management fees charged for the account. Study funds are invested in accordance with the legislative arrangement and the policy of the funds. The yield is divided among the fund members in proportion to their share in the assets of the funds.
Following Amendment No. 3 to the Law of Control of Financial Services (Provident Funds) 2005, which converted benefits and compensation provident funds to pension provident funds, study funds now possess a special status. Study funds are in fact the only savings channel that allows medium-term accumulation of funds and is the one that enables people to take out a lump sum exempt from capital gains tax.