Every parent wishes to give a safe, secure and prosperous future to their child. The day the child is born, parents plan to make provisions for his/her excellent upbringing, health education, overall development and grooming—all these require funds and hence, a wise investment planning at the right time.
Points to consider during investment planning for your child
When you start to think about investing for your child’s bright future, there are specific pointers which you must consider. Here are these points to ponder upon:
- Plan early for rational fund allocation
- Consider inflation while planning
- Select an investment plan with Premium Waiver
- Choose a scheme with a higher yield
- Plans with partial withdrawer are better
- Appointing a trust-worthy nominee
- Periodic review of your plans
Top investment options for your child’s secured future
Many investment schemes are available in the market, which can help you in ensuring a bright future for your child. Some of these are:
- Fixed and recurring deposits.
Fixed deposit (FD) is the time-tested most popular tool of investment. It guarantees the safety of your funds. Banks and NBFCs offer FDs at attractive interest rates. Many FDs are tax saving investment tools which also help in tax planning. FD account for a child as young as one year is possible. Recurring deposits are useful when you wish to invest small amounts periodically.
- Public Provident Fund (PPF):
PPF is a popular investment tool for parents. Here your funds are safe. The maturity amount from PPF enjoys tax exemption. The only crux in the scheme is the fact that you cannot withdraw the corpus before the maturity period.
- Money-back insurance scheme:
It is non-linked insurance plans which are ideal to meet the educational requirements of your child. Other benefits of the scheme are:
- Death benefits
- Liquidity benefit
- Multiple payouts facility
- Survival benefit in addition to the maturity amount
- The premium payment is only for 10 to 11 years.
- Regular periodic payout
- Unit-Linked Insurance Plans (ULIPs):
ULIPs are the units of mutual funds of equity or debt or both the types. Many ULIPS are on offer in the market, and you have to make a wise choice.
These units offer triple benefits, also called triple brownie. These benefits are:
- Higher insurance coverage
- Wise and Disciplined investments
- Investment in the equity market
The premium payment waiver is possible if the nominee claims the money.
- Systematic Investment Plan (SIP)
Although investment in the stock market is risky, it offers very high returns on investment. It is the reason why parents go for such investments. Systematic Investment Plans (SIPs), is one such scheme with many benefits like funds compounding, investment in parts, investment by the experts, and good return. You invest a sum every month for tenure to get an excellent performance.
Many investment options to ensure the future of your child are available in the market. Opt for the right mix of them and give your child a safe, secure and bright future.
