Best Children’s Investment Plans Parents Should Know About

In the journey of parenthood, there are few responsibilities as crucial as securing the financial future of our children. As we witness the dynamic shifts in the economic landscape, it becomes increasingly evident that planning for our children’s financial well-being should begin sooner rather than later.

The market offers a plethora of options, each with its unique features, but the essence remains the same – to provide a solid foundation for our children’s future.

In this article, we will delve into the importance of investing in our children’s names early and explore some of the best children’s investment plans that parents can consider.

Why Should Parents Invest Early On?

Compound Growth Advantage: Start early for more time and significant growth by milestones like education or marriage.
Inflation covers: Beat inflation by investing early, ensuring funds cover rising costs over time.
Flexibility: Choose plans with flexibility for adapting to changing needs and circumstances.
Discipline in Financial Planning: Instil financial discipline, teaching kids the importance of savings and wise money management.
Goal-Oriented Investing: Align with specific goals like education, marriage, or home buying for a purposeful approach.
Tax Benefits: Optimise taxes with plans offering benefits under Income Tax Act sections.
Financial Security: Create a safety net for unforeseen circumstances, securing your child’s dreams.

Best Children’s Investment Plans

Sukanya Samriddhi Yojana (SSY):

Introduced to promote the financial well-being of girl children.
A minimum of ₹ 250 and a maximum of ₹ 1.5 lakh can be deposited within a financial year.
A girl child’s name may be used to open an account until she turns ten years old.
Post offices and approved banks are the places where accounts can be opened.
Withdrawals may be made to cover educational costs for the account holder’s higher education.
If a girl kid gets married before she becomes eighteen, the account may be closed early.
Anywhere in India, you can move an account from one bank or post office to another.
Twenty-one years from the account’s opening date, the account will mature.

Public Provident Fund (PPF):

A financial year’s minimum deposit is ₹500, and the maximum deposit is ₹1,50,000.
The loan facility is offered from the third to the sixth fiscal year.
Every year starting with the seventh fiscal year, withdrawal is allowed.
Account maturity occurs after fifteen full financial years have passed from the account’s opening.
With additional deposits, the account can be kept open for an unlimited amount of time once it matures, up to five years.
After maturity, the account can be kept indefinitely at the current interest rate without requiring further deposit.
There is no legal order or judgment that might lead to the attachment of the money in the PPF account.

Unit-Linked Insurance Plans (ULIPs):

Fixed income: assured a 7.7% return on their investment thanks to this arrangement.

Tax reducer: This is a government-sponsored tax-saving plan that allows you to claim up to Rs. 1.5 lakh.

Begin modestly: You can make an initial commitment as little as Rs. 1,000 (or multiples of Rs. 100) and raise it as needed.

Interest rate: The government changes the interest rate every quarter, and as of right now, it is 77% p.a.

After maturity: You will get the full maturity value when you mature.

Premature withdrawal: Early withdrawal from the plan is not permitted. They will, however, accept it in extraordinary circumstances, such as when an investor passes away or if a court order is in place.

Equity Mutual Funds:

Expertly managed: experts evaluate the success of different businesses and make investments in top-performing stocks

Cost-effective: Through the Systematic Investment Plan (SIP) technique, a person can invest as little as Rs. 500 every week, biweekly, monthly, or quarterly.

Tax benefits: Individuals investing enjoy tax deductions. An individual can invest Rs. 1.5 lakh and save up to Rs. 46,800.

Best Children’s Investment Plans:

Several financial institutions offer specialized child education plans.

Plans are designed to meet the specific financial requirements associated with a child’s education, offering features like regular payouts and waivers of future premiums in case of the parent’s demise.

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Investing in children’s names is a significant step towards ensuring a secure and prosperous future for the younger generation. The options mentioned above provide a diverse range of choices catering to different risk appetites and financial goals. By starting early and choosing the right investment plan, parents can embark on a journey that not only secures their children’s future but also imparts valuable financial lessons for a lifetime.