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Pay 10,000/month for 10 years, Get 1,65,805/Year* for next 15 years.
ARN. No. KLI/23-24/E-BB/1201
Features
Ref. No. KLI/22-23/E-BB/999
Saving plans empower parents to strategically accumulate funds for a debt-free college education. Leveraging this can ensure financial stability and relieve children from the burden of student loans.
There is no better gift than the assurance of a stable future for your child. Therefore, after becoming a parent, one should begin investing in a savings plan for the child’s better future.
An education investment plan for your child’s education is a great way to build a strong foundation for their future. It is every parent’s goal to see their child’s dreams come true by providing them with the education they desire. In today is competitive world, specialized education that complements your child’s interests might help them maximize their abilities and shine! It offers them an advantage over others and helps them achieve their life’s objectives. So, it is critical to consider what kind of specialized education your child will pursue.
First, make a list of specific objectives to build the right savings plan, such as the child’s desired schooling and the associated costs. This will assist you in determining how much you need to save each month and the amount you can afford after all of your usual costs have been met. You should remember that funding studies can also be done with loans. In addition, a savings plan does not have to entail sacrificing other elements of your life, such as healthcare or retirement. As you get closer to your financial goal, you should limit your stock exposure to reduce the chance of unfavourable market moves.
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.
You can profit from capital market upswings by investing in a unit-linked child plan. A portion of your premium is used to protect your child’s future in unforeseen circumstances. The remainder of your investment is placed in the stock market. Depending on your risk tolerance, you can choose a mix of stocks and debt funds or hybrid funds that balance the benefits of each asset type. In addition, ULIPs can help you build an inflation-adjusted portfolio.
It’s a 15-year plan that can begin even under a minor’s name. With your PPF account, you can invest up to ₹1.5 lakh per year in your child’s PPF account. It is tax-free and backed by the government. The PPF offers the best tax benefits, making it a popular investment for your child’s right education investment plans.
A traditional endowment policy guarantees your capital with fixed, guaranteed returns. The policy invests your money on your behalf and shares the revenues with you through bonuses and incentives, ensuring sizeable returns to handle your little one’s education costs in the near future.
Sukanya Samriddhi Yojana is a savings scheme for female children. Because it is a government initiative, it is quite dependable, and many people consider it the finest investment plan for girls in India. As a parent, you can open an SSY account in the bank in your daughter’s name and earn a good interest rate of around 7% to 8%, subject to change. When the girl reaches the age of 21, the account will mature.
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.
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.
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, for children born today, much over a crore per year.
As you often hear, “The early bird catches the worm”, the power of early planning cannot be overstated. It lays the groundwork for a secure and prosperous future, empowering individuals to achieve their long-term goals and weather life’s uncertainties with confidence.
The key to building a solid foundation for a debt-free college education lies in starting early. Parents who begin saving for their child’s education during the early years can benefit from the power of compounding, allowing their investments to grow over time.
Different saving plans cater to varying risk appetites and financial goals. Parents can choose from options like fixed deposits, mutual funds, or education-specific savings schemes to align with their preferences and financial capabilities.
Early planning allows individuals to tap into the magical force of compounding. By reinvesting earnings and returns over time, even modest investments can grow exponentially, providing a substantial financial cushion in the long run.
Initiating investment and savings strategies early affords a longer time horizon. This extended period allows for a more gradual and less risky approach, mitigating the impact of market fluctuations and maximizing the growth potential.
Saving for children’s education begins the moment they are born. Early planning allows parents to accumulate funds systematically, ensuring their children have access to quality education without the burden of student loans or financial constraints.
In the journey to provide your children with a debt-free college education, saving plans emerge as a powerful and proactive financial strategy. Beyond the financial benefits, these plans instil a sense of security, allowing both parents and children to focus on the pursuit of knowledge and personal growth without the weight of looming debts. By embracing thoughtful savings practices and exploring tailored investment options, families can ensure that the dream of higher education remains attainable, laying the groundwork for a bright and financially secure future.
1
Starting early allows you to leverage the power of compounding, helping your savings grow over time. Early initiation provides a longer investment horizon, leading to a more substantial corpus for your child’s college education.
2
Many saving plans, such as Sukanya Samriddhi Yojana and the Public Provident Fund, offer tax benefits under Section 80C of the Income Tax Act. Exploring these options can provide additional incentives for saving for your child’s education.
3
Consider factors like risk tolerance, investment horizon, and specific goals. Options like mutual funds, Sukanya Samriddhi Yojana, and Public Provident Fund cater to diverse needs, allowing you to tailor your choice based on your preferences.
4
Yes, having a separate emergency fund is essential. This ensures that unforeseen financial challenges do not impact your child’s education savings. An emergency fund acts as a financial safety net, providing stability during unexpected circumstances.
Amit Raje is an experienced marketer who has worked in various Fintechs and leading Financial companies in India. With focused experience in Digital, Amit has pioneered multiple digital commerce in India. Now, close to two decades later, he is the vice president and head of the D2C business department. He masters the skill of strategic management, also being certified in it from IIMA. He has challenged his challenges and contributed his efforts in this journey of digital transformation.
Prasad Pimple has a decade-long experience in the Life insurance sector and as EVP, Kotak Life heads Digital Business. He is responsible for developing user friendly product journeys, creating consumer awareness and helping consumers in identifying need for life insurance solutions. He has 20+ years of experience in creating and building business verticals across Insurance, Telecom and Banking sectors
Pay 10,000/month for 10 years, Get 1,65,805/Year* for next 15 years.
ARN. No. KLI/23-24/E-BB/1201
Features
Ref. No. KLI/22-23/E-BB/999
The information herein is meant only for general reading purposes and the views being expressed only constitute opinions and therefore cannot be considered as guidelines, recommendations or as a professional guide for the readers. The content has been prepared on the basis of publicly available information, internally developed data and other sources believed to be reliable. Recipients of this information are advised to rely on their own analysis, interpretations & investigations. Readers are also advised to seek independent professional advice in order to arrive at an informed investment decision. Further customer is the advised to go through the sales brochure before conducting any sale. Above illustrations are only for understanding, it is not directly or indirectly related to the performance of any product or plans of Kotak Life.
