It can be challenging to make future financial security plans for children. When the time comes, people find that the money they have saved is insufficient despite their best efforts to give their kids a sizable financial safety net. Parents can buy the top child investment plans on the market to give their kids a financial safety net. Securing a child’s financial future requires making the right investment choices at the right time. Making future plans necessitates, like all investments, evaluating each person’s needs as well as the financial goals unique to a specific set of parents and their children.

Because their children are everything to their parents, they work incredibly hard to provide for them. It’s crucial to save for your child’s education because of the increase in tuition costs.

Importance of investment plan for a child’s education

Covering a child’s educational expenses requires early planning and investment in their academic plan. Let’s find out why.

The price of education is increasing every day
Inflation is just one of many factors driving up the cost of education, which is more expensive than ever for high-quality private education. Parents who want to ensure their children receive a high-quality education are required to pay more money than ever before, which frequently puts a significant financial strain on the family’s resources. Early educational investments can help prevent problems like these later on, when the child is actually in need of money.

Make a small investment and profit handsomely.
A child’s education plan premiums can be as low as Rs. 20,000 per year or even Rs. 2,000 per month, but by the time the child turns 17 and needs a sizeable corpus to finish school, he will have access to Rs. 2,000,000. These can be given all at once or on a regular basis to help the child reach important milestones. An investment in a child’s education has incalculable returns.

Save the child from accumulating student loan debt.
A child will almost certainly be in debt for a very long time if they take out bank education loans, which typically have very high interest rates. This is a major bummer and a huge obstacle for young professionals who begin their careers with a mountain of debt that must be paid off as soon as possible. A professional with student loan debt is compelled to seek lucrative employment at all costs, oblivious to the value of trying new things. Additionally, it makes it difficult for them to start saving or investing early in their careers.

Safeguarding the future of the child
With the aid of her education plan, a child can picture a bright future even in the absence of her parents. A child’s education plan can be established so that she can pursue her goals without worrying about the financial consequences or about them interfering with her studies.

A corpus is readily available for use whenever the child needs it.
A child education plan will enable the child to think critically and with big dreams. Most plans give the option of making payments as and when the child needs them. This gives the young person the opportunity to carefully weigh all of their options before taking a risk. The future of a child is safeguarded, and a child education investment plan gives them the freedom to plan for it without being constrained by a lack of resources. On the basis of the child’s developmental milestones, the Assured Education Plan allows for flexible payout period selection.

You have a number of child education investment plans available. Let’s take a look.

Sukanya Samriddhi Scheme (Post Office)
An Indian government program called Sukanya Samriddhi encourages parents to set aside money for their daughters. You can open the account at any post office until your daughter turns 10 years old. Every year, this scheme accepts minimum deposits of Rs. 1000 and maximum deposits of Rs. 1.5 lakh.

Deposits may be made up until the girl child turns 14 years old, and the account will mature 21 years after it was first opened. Interest is charged at an annual compound rate of 8.6%. After the child turns 18, the program also permits partial withdrawals.

For a boy or girl child, the Post Office Scheme can be a good supplemental plan that will reduce your risk and provide you with guaranteed long-term returns for your children’s future financial needs.

Child Insurance Plans
If you’re looking for the best long-term investment strategy for a child, child insurance policies might be your best choice. They are an investment and insurance product that, in the event of your untimely demise, ensures the stability of your child’s future. When the plan reaches maturity, a portion of the premium is invested to generate returns that are above average and paid out.

Make Investments in Gold
Gold has always been the best hedge against volatile and anti-equity markets. Parents invest in gold through gold ETFs, mutual funds, or E-Gold. Experts advise against investing in gold to minimize the risk associated with its physical storage.

Over a long period of time, gold is a dependable form of investment due to the forces of inflation. It also has a high level of liquidity and can be usefully cashed in for a child’s future monetary requirements.

Invest in equity mutual funds
Equity mutual fund deposits have a high ranking in the Children’s Investment Plan. The two primary arguments in favor of this are the availability of investment options and the longer time horizon of 10 to 15 years. In the past, equity funds have generated yearly returns of 12% to 15%.

Investment via Recurring Deposits
Given that interest rates are at an all-time high, recurring deposits are a good choice for parents looking for a low-risk investment strategy for the future of their kids. You can make future plans for your child by locking the RDs. Recurring deposits are made available in India by banks and post offices alike. For instance, after ten years, a monthly investment of Rs. 1000 can yield Rs. 2 Lakhs. On the official website of the Indian Post Office, there is a tool you can use to check the returns you can expect based on your monthly investment. This is a secure method to build a corpus in terms of child investment plans.

Investments in PPF
If you’re looking for a long-term investment strategy, PPF is a good choice because the money can be locked in for up to 15 years. The interest rate is 8.75%, and the minimum yearly investment is Rs 1 lakh. Post offices and banks both offer PPF account opening services.

Investments in the NSC
To save money for your child’s education, the National Savings Certificate, or NSC, is the best and most dependable option. National Savings Certificates with maturities of five years may be purchased and invested. At the current interest rate of 8.10%, one can purchase a certificate for as little as Rs. 100. Investments of up to Rs 1 lakh per year qualify for an IT rebate under Section 80C of the Income Tax Act.

Some of the child investment education plans in India include the following:

CA Mukesh Gupta
CA Mukesh Gupta
Mukesh Gupta is the founder and director of Wealthcare. He is Fellow chartered accountant, Certified Financial Planner and Certified Public Financial advisor. He is in financial services industry since 1994. He conducts free money management sessions for corporates and associations on topics related to Personal finance. His previous engagement was with Birla Sunlife group. He regularly writes on topics related to Personal finance and occasionally appear on electronic media.

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