Savings And Investment Tips For Education Of Your Child
Published On Sep 17, 2021 10:00 AM By InsuranceDekho
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Education is the only way to a bright future, and today's parents are fully aware that the appropriate education is the key to success. Everyone wants to send their children to the best schools possible so that they do not fall behind anyone in the long run. School and college fees are skyrocketing, but with the knowledge that it will all be worth it in the long run, parents are not hesitant to spend their life savings on education costs. However, it is well known that if finances are not well planned, the child may miss out on attending one of the best schools. Saving and investing in your child's education is thus the first step toward a bright future.
Saving and Investing for Your Child's Education
A well-planned future backed by financial stability will enable your children to receive the finest quality education possible; thus, it is recommended that you begin saving and investing your money from a young age so that when a large quantity of money is required, you have your savings to fall back on. Here are some ideas for how to save for your child's education:
1. Purchase A Child Plan
When it comes to protecting the future of your loved ones, life insurance policies are the finest products to invest in. Investing in Life Insurance Policies that cover your children's school expenditures is a fantastic investment if your child plans to attend an institution that charges up to 5 times your yearly income. Child Arrangements are the name given to such plans. It is recommended that you get a policy worth ten times your annual salary, and if it does not cover your education expenditures, you should consider changing plans or adding a rider.
2. Invest in Assets Such As Real Estate
Real estate assets seldom depreciate; instead, their value rises dramatically over time. If you invest in assets like real estate early in your career, when your children reach a certain age and require a large quantity of money to study abroad, you may sell the land or property for 30 to 40 times the cost price you paid for it. Nothing can be more rewarding than real estate if there are no legal complications.
3. Put Money in Public Provident Fund Account
The Public Provident Fund, or PPF, is the sole investment in which every working professional typically invests. It is a low-risk alternative with tax-free withdrawals. The returns are smaller, but they are predictable, making it a more secure and dependable investment. However, there is a limit to the amount of money that may be invested through this route - the maximum yearly limit is Rs. 1,50,000. PPFs are also less suited for investors who are ready to take on more risk by investing in business funds.
4. Put Money into Mutual Funds
Over the last decade or so, financial planning to establish a corpus fund for a specific purpose has risen in popularity. Investing in education is also a component. Building a retirement income is quite common, and a tiny percentage of investors are also parents who wish to save for their children's education. SIPs, which allow you to contribute regularly, may give greater returns than one-time/lump sum investment mutual funds, particularly over substantially longer periods.
One of the best decisions you can make as a parent is to save for your child's education. This will not only ensure your child's future but will also assist you in fulfilling your role as a decent parent. Take a look at the above-mentioned methods of saving and begin investing right now.
You may also like to read - Should Parents Invest in a Child Insurance Policy?
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.