An education investment plan for your child’s education is a great way to build a strong foundation for their future. To their parents, a child is everything. And it is every parent’s goal to see their child’s dreams come true by providing them with the education they desire. In today’s competitive world, specialised education that complements your child’s interests might help them maximise their abilities and shine! It offers them an advantage over others and helps them achieve their life’s objectives. So it’s critical to consider what kind of specialised education your child will pursue.
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 complete health and education savings plan for the child’s future.
Investment Strategy for Child’s Education Savings Plan
First, make a list of specific objectives to build the right education 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, an education 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.
Investing in financial tools that give good returns is the cheat code to ensure your child’s future!
Different types of education Investment Plans for your child
- Unit Linked Life Insurance Plan (ULIP)
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.
- Public Provident Fund (PPF)
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 you little one’s education costs in the near future.
- Sukanya Samriddhi Yojana (SSY)
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.
You must be prepared to help your child achieve their educational goals without difficulty. A plan that will keep you financially comfortable while also meeting your child’s educational goals, no matter what life throws at you. After all, your child’s dreams are your dreams.
- A Consumer Education Initiative series by Kotak Life
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.
Reviewed By :
Prasad Pimple
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
