All Information You Need About Investment Plan for Your Child
Updated On Sep 26, 2021
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Ever since the birth of a child, a responsible parent tries their best to fulfill the needs of their kid in every way possible. However, nowadays it gets extremely difficult to support your child in dreaming big and achieving great in life due to the high rising education expenses. Therefore, to handle this situation, it is significant to invest in appropriate child investment plans early in life i.e. right after the birth of your child. You can consider the following investment options:
1. Sukanya Samriddhi Scheme
It is a government sponsored saving scheme designed specially for the girl child in India. Parents of young girls are encouraged to invest in this scheme by opening an account and depositing money into it for the next 14 years in order to save enough wealth for their child. The minimum deposit limit is Rs 1000 and Rs 1.5 lakh maximum per annum. It takes about 21 years for the policy to mature after the starting date of the account. It earns a high interest rate of around 9.2 per cent.
2. Child Education Insurance Plan
A child insurance policy helps the parents in meeting the high education expenses of their children even in the absence of the parent. This insurance plan is specifically designed to look after high education expenses. In case, the parent dies during the plan tenure, then the remaining premiums are generally waived off by the insurance provider but the insurance plan remains active.
3. PPF or Public Provident Fund
It is known to be one of the most reliable investment instruments for your child. One can open a PPF account for their child from the banking institution offering PPF services. The deposit per year is Rs. 500(minimum) whereas the maximum is Rs 1.5 Lakh. The amount gets deposited for a time period of 15 years, whereas you are allowed to make partial withdrawals from the account after the 7th year of the deposit has passed.
4. Short Term Funds
It is recommended to consider having a long maturity window when planning to make investment for your child’s education, however, there are various short term expenses that can arise to fulfill your child’s need like paying for school fees, books, tuition, clothes, etc, which can be met through short term financial instruments such as bond fund, short term funds, etc.
Disclaimer: This article is issued in the general public interest and meant for general information purposes only. Readers are advised not to rely on the contents of the article as conclusive in nature and should research further or consult an expert in this regard.