One of the most vital elements of financial planning is saving money for your child’s education plans. Every parent does everything they can to provide the most remarkable life for their child. One of these is a solid education. But, unfortunately, you can’t afford to ignore inflation when figuring out how much money you’ll need to keep aside while saving for college for your child. The cost of a college degree has the greatest inflation rate in the country.
You might not know whether your child’s future will include studying sophisticated chemical compounds or economic ideas. It can be challenging to estimate the financial requirements. Still, you need to have a fair idea about your child’s future education and be prepared for it financially by investing in a child education plan.
Importance of Education
Children’s emotional and mental well-being can benefit significantly from exposure to formal schooling. Studying, sports and other competitive activities help children build resilience and confidence in adversity. Children’s primary source of exposure to information is their educational institution, and thereby, it is extremely important to start investing in the best children’s savings plans. This facilitates progress in the mental growth. In addition, one’s worldview is shaped by exposure to various cultural influences.
Four Best Child Education Plans
When planning for your child’s education, you should seek a child savings plan with a maturity date corresponding to the year you need the money. The following are the four most excellent child education plans.
Guaranteed Money Back Plans
Planning for a child’s education involves more than just college tuition costs. The expense of schooling begins much before that point. You will need to pay for the coaching lessons at various levels and the graduation fee. With a Money Back Plan, you receive periodic payments and a considerable sum upon maturity, and the task of saving for college becomes easy.
In addition, in the event of a misfortune, you receive an amount insured as your backup plan. Thus, the Money Back Advantage plan safeguards your child’s future from all angles.
You need to pay a premium for ten years when you purchase the plan, and you earn rewards as per the policy terms. You can use these payments to cover various costs associated with your child’s education. At maturity, you will get the amount guaranteed, which can be used for education expenses.
Guaranteed Savings Plan
Guaranteed Savings plans are typically non-participating plans with a predetermined endowment guarantee. You are required to pay the premiums for a set time. However, you will get the rewards when the plan matures.
You can select your insurance premium and policy term based on the amount you require and the year you require it. If you die during the policy period, the beneficiary will cover the sum, and all future payments will be waived. This approach protects your child’s hope in all educational conditions.
Public Provident Fund (PPF)
Public Provident Fund is considered the best child education plan. PPFs are guaranteed for at least 15 years. This savings strategy can be pursued if it satisfies the prerequisite. Under this scheme, the interest rate shifts over time. If you require access to some of your money earlier than the end of the term, you can do so beginning in the seventh year.
Opening a PPF account requires ₹500 to get started, and such consistent and budget-friendly investment can promise you a secure future for your child’s education.
Sukanya Samriddhi Yojana
This is a unique savings plan to empower girl child education. There is an annual deposit capacity of ₹1.5 million, with a minimum deposit requirement of ₹1,000. The length of the policy is 21 years. Only during the first 15 years will you be required to make deposits.
This savings plan offers better returns than comparable alternatives. In addition, there may be tax benefits for the amount invested. While the policy term is 21 years, you can access up to half of the funds once your daughter reaches 18 and needs financial assistance for college.
Did You Know?
The average cost of attending college rises by 8% every year, making the financial strain daunting. A four-year private institution currently costs an average of ₹50 Lakhs. According to such figures, tuition at a private university might cost children born today much over a crore per year.
Conclusion
Some things in life just can’t be postponed or compromised. The education of your child is one such aim. As a result, you shouldn’t combine your child’s school savings with any other kinds of investments, rather, they should have their own dedicated savings plan. The best child education plan guarantees a bright future regardless of circumstances.
