Securing the future of their children financially is the biggest responsibility of every parent. Parents try to save a lot for the expenses from the education of children to their marriage. In such a situation, it is important to plan all these expenses systematically in advance so that there is no shortage of money at the time of need.
As the child grows up, his expenses also increase, so it is wise to invest in different schemes instead of investing all the money in a single scheme. It is very important to diversify your investments. There are many investment options available in India that can meet this need of yours. Also, these schemes provide opportunities for security and growth. So let us tell you about some such great investment options today!
Sukanya Samriddhi Yojana
Sukanya Samriddhi Yojana (SSY) is a government savings scheme launched to secure the future of daughters. Guaranteed returns are available on this government savings scheme. Parents or legal guardians can open an account for a girl child below the age of ten. It matures after 21 years from the date of opening the account or when the girl child gets married after the age of 18.
In this government scheme, daughters are being given an attractive interest of 8.2% per annum. In this scheme, you can invest a minimum of ₹ 250 to a maximum of ₹ 1.5 lakh every financial year. This scheme also offers tax benefits under Section 80C of the Income Tax Act.
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Public Provident Fund
The Public Provident Fund (PPF) is a long-term investment scheme of the Government of India. Currently, an attractive interest rate of 7.1% is being offered on it. The interest rate is revised every quarter, and the interest received on this scheme is completely tax-free.
Investment made in PPF is also eligible for tax deduction under Section 80C. The lock-in period of this scheme is 15 years, which makes it a good option for long-term goals like higher education for children.
National Savings Certificate
National Savings Certificate (NSC) is a fixed-income investment scheme of the Government of India. This certificate is a good investment option for those who want security as well as tax benefits. Its maturity period is five years. The government keeps revising the interest rate on it from time to time. You can buy it from the post office.
Investment in NSC can be started with a minimum of ₹ 1000 and there is no maximum limit on investment. The interest received on this certificate is reinvested and the amount invested in NSC is eligible for tax deduction under Section 80C of the Income Tax Act. Given all these advantages, NSC can be a good means of saving money for your child’s education.
Unit-Linked Insurance Plan
Unit-Linked Insurance Plan (ULIP) is an insurance plan that offers the benefits of both investment and life insurance together. In this, a part of the premium is invested in life insurance coverage and the rest in equity or debt instruments.
ULIPs have a lock-in period of five years and are likely to give high returns depending on the market performance. Tax benefits are also available under Section 80C on the amount invested in ULIP. However, before investing in it, it is important to understand the other charges and risks associated with it.
Mutual Fund SIP
Systematic Investment Plan (SIP) allows you to invest a fixed amount regularly in mutual funds. That is, SIP is a method of investment, in which you invest a fixed amount regularly. This method of investment not only promotes financial discipline but also helps in avoiding market fluctuations. This is a good investment option to understand the power of compounding in the long term. SIP can prove to be a powerful tool to achieve long-term goals for children’s future.
Fixed Deposits
Fixed deposits (FDs) are a traditional way of investing that offers assured returns over a fixed period. Though its interest rates may be lower than other investment options, this way of investing is quite popular among investors who want to earn fixed returns on the amount invested and do not want to take any risk. Some banks also offer special FDs for children, which can be used to meet education expenses.
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