If you are a parent and think that to invest in a child plan would be blocking a certain amount of money every month or year, think again. Some of the child plans in India come with dual benefits; they not only help you save for your child’s future but also offer insurance for the safety and security of children during contingencies. Various banks and non-banking financial institutions these days offer child plans. You can choose a plan that is flexible, affordable and suitable to your needs and requirements.
Bank deposits and company deposits both can be considered as two of the most reliable children plans to invest in India due to their higher rate of returns. However, NBFCs like Bajaj Finance offer higher FD rates compared to banks or other companies. To invest in a company deposit, all you need to do is deposit a minimum of Rs.25000 to open an FD account. You can even invest a higher amount to get more returns at the time of maturity. According to the investment done, the fixed deposit interest calculator will help you calculate the total amount you will be receiving at the time of maturity. If you invest in a fixed deposit for a child today, it will give you great returns after a few years. The amount can be used for various purposes like higher education, pursuing extra-curricular activities or for the wedding.
In India, the family starts saving for the child’s wedding as soon as he/she is born. There are families, who prefer to invest in gold than in any other investment scheme. However, investing in gold jewelry may be a tad expensive as you may end up paying high making charges. Hence, if you wish to invest in gold, you can either to it through a gold exchange-traded fund (ETF) or electronic gold or E-gold in demat form. These can be converted to physical gold as and when required. Investing in gold can give you good returns as the value of gold has only appreciated over the years, and better than other assets.
Public Provident Fund
This is a perfect child plan to invest in your child’s future. The biggest benefit is that PF has a lock-in period of 15 years. Hence, there is no chance to withdraw money prematurely. Also, the corpus with interest would be ready just at the time your child needs it for higher studies. The amount can take care of the tuition fees, and other academic expenses that are incurred during the course of studies. Moreover, it also offers a higher rate of interest compared to banks to benefit you more at the time of maturity. One more added advantage here is that the interest earned is totally tax-free, and you also get a tax rebate of up to 1.5 lakhs under Section 80C of the Income Tax Act.
Sukanya Samriddhi Yojana
With an interest rate of 8.5%, this child plan by the Government of India is an excellent plan when it comes to securing your child’s future. However, this plan can be availed only by the parents of a girl child, and to secure her future – be it education or marriage. The big plus here is again the lock-in period, which is for a long duration enables to build a sound corpus over the years. Also, the interest earned is tax-free apart from the tax benefit under Section 80C of the Income Tax Act. As parents, you can open the account till your girl child turns 10. The minimum deposit to open an account is as meager as Rs.250 per year, which can go up to 1.5 lakh in a year.
Term Insurance is a life insurance plan to provide financial safety and security to you. However, term insurance also benefits your loved ones in your absence, and they can claim the death benefits offered by the insurance plan. If you are planning to build a secure future for your child, even when you are not around, term insurance is a bankable option. You can nominate your child to receive all the financial benefits once he/she becomes an adult. You can either choose the option of a lump-sum payment or a monthly amount to take care of their daily requirement. In both cases, the amount will help to manage the household and other expenses that were otherwise taken care of by your salary.
Choose the right child plan to give your child the best financial security you can!