Protecting the financial future of your children is a big responsibility of every parent. Children will need money from time to time for education, marriage and other important expenses. To ensure that when they need money, you have the right amount, it is important that you spread your investment plans in different ways.
There are many investment schemes in India that meet this need and give you a chance of safety and profit. Let’s take a look at some good investment options.
Sukanya Samriddhi Yojana (SSY)
Sukanya Samriddhi Yojana is a government savings scheme aimed at securing the future of girls. Parents or legal parents can open an account for a girl under ten years of age. After the date of opening the account, after 21 years or when the girl is 18 years of age, she matures when she is married. By 2025, the scheme provides an annual compound of 8.2% interest rate. The deposit can ranged from minimum Rs 250 to maximum of Rs 1.5 lakh per financial year. This scheme also provides tax benefits under Section 80C of the Income Tax Act.
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Public Provident Fund (PPF)
Public Provident Fund is a long -term investment scheme supported by the Government of India. It currently provides an attractive interest rate of 7.1%, which is revised on a quarterly basis, and the earned interest is tax-free. Investments made in PPF are eligible for tax deduction under Section 80C. The scheme has a 15-year lock-in period, which makes it suitable for long-term targets such as financing higher education.
National Saving Certificate (NSC)
The National Saving Certificate is a certain income investment scheme that encourages small to medium -income investors to invest on income tax. Its maturity period is five years and provides competitive interest rate, which is periodically modified. The earned interest is re -invested and is eligible for deduction under Section 80C. NSC can be a safe investment route to store money for your child’s education.
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Unit Linked Insurance Plans (Ulips)
ULIP insurance is a low investment option that provides double benefit of life insurance and investment returns. A part of the paid premium is allocated for life insurance coverage, while the remaining is invested in equity or loan means. ULIPs have a five-year lock-in period and high returns are likely to be based on market performance. They also provide tax benefits under Section 80C. However, it is necessary to assess the related fees and risks before investing.
Mutual Fund SIP (MF SIP)
The systematic investment plan allows you to invest a certain amount in a regular mutual funds. This method promotes financial discipline and takes advantage of the power of compound over time.
Adil Shetty, CEO of Bankbazar.com, says, “Equity mutual funds have long-term ability to give high returns, which is suitable for goals like raising funds for higher education. While SIP does not offer tax deductions under Section 80C, provides some mutual funds like Equity-Link Savings Scheme (ELSS). Investment through medium is one of the most effective investment strategies to increase your property, but keep in mind the risk and volatility. “
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Fixed Deposit (FD)
Bank fixed deposits are methods of traditional investment that give sure returns in a certain period of time. Although interest rates may be lower than other investment options, safety and predictions make FD a favorite option for conservative investors. Some banks provide special FD for children, which can be used to meet education related expenses.
However, before investing, it is necessary to assess the risk, returns and lock-in periods of each option to coordinate with your financial goals. Investing in various schemes can reduce the risk and the return may be maximum.
