Child Investment Saving Plan
There are a lot of good options if you want to start investing with the future of children in mind. This includes mutual funds, PPFs, SSYs, and bank FDs.
There are several alternatives available to you if you wish to make plans for the betterment of your children’s future. When you are married, you shouldn’t have any financial issues later on, therefore it’s important to start saving right now for your children’s future schooling.
There are a lot of wonderful possibilities if you want to start investing with the future of children in mind. This covers mutual funds, PPFs, SSYs, and bank FDs.
Mutual Funds
If some aggressive thought is given when doing financial planning with children in mind, mutual funds may also be a better option. Mutual funds can also be purchased for young children. Their career or additional education could benefit from it. One might begin making SIP investments in mutual fund plans.
SIP can be initiated with just Rs. 100. Long-term investments yield better results. With the aid of your financial counsel, you are able to make mutual fund investments in the names of your children.
Sukanya Samriddhi Yojana (SSY)
The ideal plan for the secure and prosperous future of daughters is this one. The parent or legal guardian of any girl child can open this account under the Sukanya Samriddhi Yojana (SSY) between the ages of 0 and 10. You can open a Sukanya Samriddhi Yojana account at any official government bank or post office. The interest rate on this is currently 7.6%. Sukanya Samriddhi Yojana accounts can be opened for as little as Rs. 250.
A minimum of Rs 250 and a maximum of Rs 1.50 lakh can be deposited each year under this scheme. Section 80C allows for the tax exemption of investments in SSY. SSY investments must be made for a minimum of 15 years after the account is opened. However, this account matures after 21 years. In this, withdrawal can be done after the daughter turns 18 or after passing 10th.
Fixed Deposits (FDs)
Bank FDs are a reliable and very well investment choice in our country. One explanation for this is that you can complete FD in a time frame ranging from 7 days to 10 years. In an emergency, it can also be quickly extracted from it. With a deposit between Rs. 100 and Rs. 500 made in several banks, the parent or legal guardian of the child can begin investing in it. SBI is currently offering interest on FDs ranging from 2.90 percent to 5.40 percent (7 days to 10 years).
Public Provident Fund (PPF)
The Public Provident Fund (PPF), which has a longer lock-in term, is a better format. When making future plans for children, you have plenty of time. In this scheme, the deposit is likewise 100 percent safe. PPF accounts can only be opened in a child’s name by the parent or legal guardian. Children under the age of 18 may open a PPF account.
PPF now has an interest rate of 7.1 percent. PPF accounts expire after 15 years. It is possible to invest Rs 1.5 lakh a year in this. By opening separate PPF accounts, parents with two children may invest up to Rs 3 lakh.
You are allowed to hold a single lump-sum withdrawal from the account after 15 years. It can then be extended for an additional five to five years. PPF investments qualify for an 80C tax exemption of up to 1.5 lakh.