Best Investment Plans for Daughters in India

Investing in the future of your daughter is a heartwarming gesture, and in India, there are numerous investment plans that allow you to secure your daughter's financial future. Whether you wish to save funds for your daughter's education or her marriage, the plans that we will discuss in this article will offer a great combination of returns, tax benefits, and long-term security. 

So, let's explore the best investment plans for daughters in India, providing detailed insights into each scheme and its features.

Benefits of Investment Plans for Daughters

Before delving into the specific investment plans, let's consider some of the key advantages of these schemes:

• Financial Safety: By investing in your daughter's future through these plans, you can give her a solid financial safety net for important life events like education, marriage, or other major turning points. It enables you to budget and set aside money, guaranteeing that financial limitations do not prevent her from realizing her dreams.
• Tax Benefits: Several investment plans for daughters come with tax benefits, primarily under Section 80C of the Income Tax Act. This means that the amount you invest in these schemes is eligible for deductions from your taxable income, reducing your overall tax liability.
• Compound Interest: Over time, your assets can grow exponentially, thanks to the strong financial principle of compound interest. In many of these investment plans, the interest you earn is reinvested, generating interest on both the initial principal and the previously earned interest.  Your investments' value is considerably increased by this compounding effect, making them an effective tool for accumulating wealth.
• Insurance Coverage: Some investment plans also offer the benefit of life insurance protection. This indicates that your daughter is covered by an insurance policy while you increase your savings.

Top 6 Investment Plans for Daughters 

Below mentioned are the 6 best daughter investment plans in India:

1. Sukanya Samriddhi Yojana Scheme

Sukanya Samriddhi Yojana (SSY) is a government-supported investment plan aimed at promoting the welfare and education of girls in India as part of the "Beti Bachao, Beti Padhao" campaign. graceful

One of the primary advantages of this scheme is the higher interest rate it offers in comparison to other savings schemes. Additionally, SSY allows for withdrawals to cover educational expenses and provides the flexibility to transfer the account between authorized banks or post offices. Moreover, the contributions made to this scheme qualify for tax deductions, up to a maximum of Rs. 1.5 lakh per financial year under Section 80C of the Income Tax Act. 

Features of Sukanya Samriddhi Yojana (SSY)

• Parents or guardians can open this account for a girl under 10 years old.
• You can open this account at certain post offices or banks by showing some important documents like the girl's birth certificate, and the parents' or guardians' ID and address proofs.
• You can start with a minimum deposit of Rs. 250, and you can put in up to Rs. 1.5 lakh each year, in multiples of Rs. 100.
• The account will stay open for 21 years from the day you open it or until the girl gets married, whichever happens first.
• It gives an interest rate of 8%, and this interest is added to your money every year. Please note that this interest rate is subject to change as per market conditions.

2. Post Office Term Deposit

The Post Office Term Deposit is another good way to save and grow your money, especially for your girl child. You can open this savings account at post offices all over the country. It's like putting your money in a safe place where it grows over time. The government supports this scheme, so it's a trustworthy way to invest your money.

Features of Post Office Term Deposit

• When you put your money in this scheme, it stays there for at least 5 years.
• If you need to, you can move your Post Office Term Deposit anywhere in the country.
• Depending on how long you leave your money, you can get 7.5% interest, which means your money can grow faster.
• You can open a Post Office Term Deposit for a child who's older than 10 years.
• You can start with just Rs 1,000, and there's no limit to how much you can put in.
• The money you earn from this scheme is added to your total income, and you pay tax on it based on your income. But if you keep your money in this scheme for 5 years, you can get some tax benefits under Section 80C of the Income Tax Act.

3. Unit Linked Insurance Plan (ULIP)

A Unit Linked Insurance Plan (ULIP) is a special investment tool that does two important things at once. First, it keeps you safe by offering insurance coverage. Second, it helps your money grow by investing it in different ways. ULIPs are a smart way to think about your future and your family's security. These plans are made for people who want to plan for a long time and make sure they have insurance too. When you pay for a ULIP, some of your money goes into insurance to keep you safe, and the rest goes into investments, like stocks or bonds.

Features of Unit Linked Insurance Plan (ULIP)

• ULIPs serve a dual purpose by providing life insurance coverage and investment opportunities.
• Eligibility criteria for ULIPs include individuals aged between 18 and 75 years.
• ULIPs offer a variety of investment options including equity funds, debt funds, and balanced funds.
• ULIPs have a lock-in period of 5 years, promoting long-term investment discipline and allowing partial withdrawals after this period.

4. National Savings Certificate (NSC)

Another best investment plan for daughters is the National Savings Certificate (NSC). The NSC is a widely used investment scheme in India that's fully supported by the government. This plan is designed to help people, especially those with moderate incomes, save their money and earn fixed returns over a specific period. It provides a secure and dependable way to grow your savings, and you can easily get it from any post office across the country.

Features of National Savings Certificate (NSC):

• NSC offers you an annual fixed interest rate, which is revised every few months by the government.
• You can get a deduction of up to Rs. 1.5 lakhs under Section 80C of the Income Tax Act.
• Starting with just Rs. 1000, NSC makes it accessible to almost everyone. There's no maximum limit. 
• You can buy NSC at any post office by providing the necessary documents for identification.
• You can transfer your NSC from one post office to another or from one person to another without losing out on the interest or the final amount.
• The interest earned on your NSC is compounded annually and reinvested, with the payout only happening when the certificate matures.
• When the NSC reaches its maturity date, you'll receive the entire saved amount with the accumulated interest. While early withdrawal is typically not allowed, there are exceptions, such as in the case of the investor's demise, a court order, or forfeiture by a government officer.

5. Children Gift Mutual Funds

A Children's Gift Mutual Fund is like a special money plan that's made just for saving and investing for a daughter's future. The scheme is meant to help families build up savings over a long time, so there's enough money to support the girl child as she grows up. The idea behind Children Gift Mutual Funds is to start saving money for your daughter when she is young so that funds can grow over time due to compounding.

Features of Children Gift Mutual Funds

• These funds offer a long-term savings option, letting your money grow over time.
• Experienced professionals manage the fund's investments on your behalf, making smart choices for you.
• Your money is spread across various investments, reducing the risk if one doesn't do well.
• These funds are often used for education savings, helping with expenses like tuition and books when your child goes to college.
• You can contribute regularly, adjusting the amount based on your financial situation.

6. Public Provident Fund (PPF)

The Public Provident Fund (PPF) is a popular savings plan that the Indian government started in 1968. It's like a special way to save money for a long time. The government made it to help people save their money safely and encourage everyone to think about their future. The best thing about investing in PPF is that you don't need to pay tax on the interest you earn and the money you get when your PPF account is done. It's a good way to save on taxes under section 80C of the Income Tax Act, of 1961.

Features of Public Provident Fund (PPF)

• You can put in at least Rs 500 every year, up to a maximum of Rs 1.5 lakh.
• Minimum tenure is 15 years, which is extendable in blocks of 5 years.
• You can put money in your account in cash, by cheque, using a demand draft (DD), or through an online transfer.
• You can only have one person's name on a PPF account.
• If you can't keep putting money in your PPF account, you can close it.
• No one can take your PPF money, even if they have a court order for your debts.

Final Words

Investing in the best investment plan for a daughter's marriage or education is an expression of love. By choosing one or more of these best daughter investment plans, you can secure her financial well-being. However, it's crucial to assess your financial goals and risk tolerance before selecting the most suitable investment plan for you. Diversifying your investment portfolio may also offer a more comprehensive approach to securing your daughter's future.