Children’s Day 2024: Every parent aspires to secure a bright future for their children and works hard to ensure they have access to the best education and career opportunities. To make a child’s future financially strong, it is essential to start planning and investing with a future-focused approach. Effective financial planning, begun at the right time, can make all the difference. On this Children’s Day, it’s a perfect occasion to take that first step. There are many investment options available that can help build a future fund, which will prove helpful in the education or marriage of children in the future.
Let’s explore best investment options for children
Unit-Linked Insurance Plan
A Unit-Linked Insurance Plan (ULIP) is a great option to secure your child’s financial future. ULIP is a popular choice for those who want long-term wealth creation. It combines the benefits of life insurance coverage with investment. They offer the dual benefit of life insurance as well as market-linked returns. You can invest based on your risk appetite while enjoying market-linked returns.
Life Insurance
You can consider life insurance plans to meet specific financial goals including financing your child’s higher education abroad or saving for their wedding. Apart from providing financial security in difficult situations, life insurance plans can prove to be a powerful investment tool. Policies like endowment plans provide financial protection in case of unforeseen events. They ensure disciplined savings during the policy term.
SIP
If you can save a fixed amount every month, you can start investing through SIP (a systematic and disciplined way of investing in mutual funds). These are suitable for those who may not have a lump sum to invest. SIP can potentially offer high returns in the long term.
FD or RD
If you are a traditional investor and do not want to take risks, then you can start investing money in FD or RD scheme. FD or RD offer a fixed interest rate, which ensures stability in returns. However, the returns may not be as high as some market-linked instruments. It is the preferred option for risk-averse investors.
Sukanya Samriddhi Yojana
The Government of India’s special scheme Sukanya Samriddhi Yojana is designed for girls up to 10 years of age. You can also avail a tax exemption in Sukanya Samriddhi Yojana. This long-term investment ensures financial security for the girl’s education and marriage.
Gold
Gold has been a traditional investment option in India which proves to be immediately helpful during emergencies. Many relatives gift gold coins, jewellery and bullion to newborn babies as an investment. If you want, you can buy gold in the name of children from now itself. According to HDFC Life Insurance, although the price of gold fluctuates, it is not linked to market fluctuations, making it a reliable investment during poor market performance.
Public Provident Fund
The Public Provident Fund (PPF) is also a good option for creating a fund for children’s future in the long term. It is a government-backed savings scheme that offers attractive tax benefits. With a lock-in period of 15 years, PPF encourages disciplined savings and can be an effective tool to build adequate funds for your child’s future needs.
Real Estate
Real estate investment offers a promising long-term strategy for wealth accumulation. Though it lacks the liquidity of other investment options, property values generally appreciate over time, creating a valuable asset that can potentially fund your child’s future endeavours.
