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Best Investment Plans for Children - Secure Your Child's Future

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  • 14th Apr 2022
  • 3,153

Best Investment Plans for Children - Secure Your Child's Future

Many parents believe that child investment plans are the need of today. Given the rate at which inflation is noting an upward trend, your child’s future and financial security need to have a dedicated investment made in their name. The best solution to securing your child’s future financially is to look for the best child investment plan as per your financial goals and futuristic plans for your child. Child investment plans come with added benefits and have additional support from the government and insurers.

This article will discuss the best child investment plans and focus on all the aspects of a children’s investment plan. Moreover, it will also run through the best investment plan for child future and the best one-time investment plan for your children. Also, in India, some financial tools have added benefits for girl children, specifically dedicated to empowering them financially. Thus, we will also take a brief look at the best investment plan for girl child in India.

Best Investment Plan for Child’s Future

The financial market, specifically in the case of insurance and investment policies, is highly saturated, and you will get a long list of options to pick from. And this vivid availability makes it very difficult for the parent to choose the correct and the best child investment plan.

Here is a list of child investment plans that might cater the best to your child’s needs:

1. ULIP for children (Unit Linked Insurance plan)

Unit Linked Insurance Plans are a great investment option for your children; especially for girls, as they yield higher returns. ULIPs are the financial plans that offer both the security of insurance and the opportunity of investment in the markets. In addition to this, they offer triple benefits as a child investment plan.

  • In case of the demise of the parent before policy maturity, the insurer will pay the further premiums of the policy.
  • The child will receive a monthly income/allowance to support his education in the absence of parents.
  • The insurance company will allocate the child a lump sum payout on parents’ demise to help them meet the daily expenses.

2. SIP (Systematic Investment plan)

SIPs are mutual fund schemes that serve as one of the best child investment plans. In SIPs the bank invests the amounts in market funds like debts, equities, or hybrid funds, which allows them to grow the income to a large extent. SIPs are a great choice for parents as the best one-time investment plan for child as they ensure a better return on investment. However, SIPs are market-linked financial products that are influenced by market fluctuations and performance.

3. Sukanya Samriddhi Yojana(SSY)

SSY or Sukanya Samriddhi Yojana is a savings scheme available for girl children in India. Being a government scheme, it is highly reliable and preferred by many as the best investment plan for girl child in India. As a parent, you can open this scheme in the name of your daughter in the bank and yield a good interest rate of approximately 7% to 8%, subject to changes. The account will mature once the girl turns 21-years old. The minimum investment amount for this scheme is ₹1000/- and the maximum is ​​₹1.5 lacs.

4. Debt Fund - Market fund (One-Time investment option)

This option is preferred by parents as the best investment plan for child future because some of the debt mutual funds offer better returns than simple bank deposits. Additionally, they are more tax-efficient making them a much better choice. You can opt for Debt Funds if you are looking for a long-term investment goal to support your child’s future.

5. PPF - Public Provident fund (long term traditional plans)

In the list of best child investment plans, PPF is a key player as a long-term investment that is highly secure. In PPF funds are locked in for 15-years and you can invest a minimum of ₹500 to ₹1.5 lacs per annum. PPF on average generates returns at a rate of interest ranging from 8% or above. You can open PPF accounts at banks and post offices.

It is highly advised that parents understand the options mentioned above before diving deeper into and selecting one of them. Once you have selected the type of child investment plan, you should pick a policy based on the premium amount and features.

- A Consumer Education Initiative series by Kotak Life

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