Everyone wants to secure a better future for their children, and parents make a lot of efforts to ensure this. They do not want their children to miss out on the best education and career opportunities due to a lack of money. In such cases, it is essential to start investing with the future in mind. Proper financial planning is needed from today itself. Since today is Children’s Day, why not begin this process now? There are many investment options available that can help create funds for the future. Here are some of which will prove helpful for your children’s education or marriage.
Unit-Linked Insurance Plans (ULIPs)
Unit-Linked Insurance Plans (ULIPs) are a great option to secure your child’s financial future. ULIPs are a popular choice for those who want long-term wealth creation. They combine the benefits of life insurance coverage with investments. ULIPs offer the dual benefit of life insurance as well as market-linked returns. You can invest based on your risk appetite while enjoying market-linked returns.
Life Insurance
Life insurance plans can help meet specific financial goals, such as financing your child’s higher education abroad or saving for their wedding. Apart from providing financial protection during difficult situations, life insurance plans can also be a powerful investment tool. Policies like endowment plans ensure disciplined savings and provide financial protection in case of unforeseen events.
SIP (Systematic Investment Plan)
If you can save a fixed amount every month, you can start investing through SIP, a systematic and disciplined way of investing in mutual funds. SIPs are suitable for people who may not have a lump sum to invest. Over the long term, SIPs can potentially offer high returns.
FD or RD (Fixed Deposit or Recurring Deposit)
If you are a traditional investor and prefer a risk-free option, you can invest in FD or RD schemes. These offer a fixed interest rate, ensuring stability in returns. However, the returns may not be as high as those from market-linked instruments. FD or RD is the preferred option for risk-averse investors.
Sukanya Samriddhi Yojana
The Government of India’s Sukanya Samriddhi Yojana is a special scheme for girls under 10 years of age. You can also avail tax exemptions with this scheme. It is a long-term investment that ensures financial security for a girl’s education and marriage.
Gold
Gold has been a traditional investment option in India and is immediately useful during emergencies. Many relatives gift gold coins, jewellery, and bullion to newborn babies as an investment. If you wish, you can buy gold in your child’s name from now. According to HDFC Life Insurance, although the price of gold fluctuates, it is not linked to market performance, making it a reliable investment during economic downturns.
Public Provident Fund (PPF)
The Public Provident Fund (PPF) is another good option for creating funds for your child’s future over the long term. It is a government-backed savings scheme that offers attractive tax benefits. With a lock-in period of 15 years, PPF encourages disciplined savings and can effectively build adequate funds for your child’s future needs.
Real Estate
Investing in real estate can be a long-term strategy to build wealth. Although real estate is not as liquid as other investments, the value of the property increases over time, providing a potential source of funds for your child’s future needs.