Right before you start your family planning, you need to get your finances in place. You have to start saving even for unpredictable and emergency situations that may or may not arise. You can save yourself the hassle of loans and borrowings and other woes if you have money invested in the right places. These are some investment options for a child that can help you in the short or long run.
Provident Fund (PF):
When it comes to investing for your child, Provident Fund is one of the best options available. You can create a healthy corpus as a long-term solution because you cannot withdraw money from the corpus until the end of the maturity period. This keeps your money locked in and ready to use for your child’s higher education in India or abroad. It is considered one of the safest investment options.
Sukanya Samriddhi Yojana (SSY)
If you have a girl child, you should consider investing in the Government-backed Sukanya Samriddhi Yojana. With a 9.1% interest rate, this deposit scheme is one of several that offer great interest on your principal amount. It also comes with tax benefits. You can invest and use this amount at any time after the birth of your baby. The tenor of the deposit is 21 years from the time of opening such account. You can open this account at any post office or other authorized banks the information of which you can easily find online.
Child Insurance Plans
These are basically life insurance policies that help you meet the needs of your children. There are various different insurance plans available. Several banks and NBFCs provide child insurance services. The policies can be customized to fulfill your specific requirements. This insurance can take care of your child’s health issues, education and other several other needs. Insurance, in today’s time, is a necessity and not just an option.
Equity Mutual Funds
You can invest in equity mutual funds to grow your wealth and secure a happy, fulfilling life for your young ones. Even if you can manage just a small amount, mutual funds are worth the risk. Through equity mutual funds, experts take charge of deciding the best and least risky options to invest your money. Although you have to be aware of the risks involved in equity mutual funds, the interest that you earn in the long run can be higher than several safe investment plans.
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Having your home is the best security for your child. It is one of the most important necessities when it comes to raising children. If you have the capacity to invest in a second home, it would further help you with several expenses for your child. You can lease your second home and earn money through rent. You can create a savings plan that can come in handy during emergency medical problems or fund your child’s education.
Fixed Deposit (FD):
You can earn a higher rate of interest through fixed deposit schemes. These are perfect for both small and long-term investment goals. Several banks and NBFCs in India offer fixed deposits for children. Compare the FD interest rates offered by these financial institutions and use the FD calculators which are easily available on the websites to determine how much you will earn by the time your FD matures.
NBFCs like Bajaj Finance offer the best FD interest rates. For further insight into fixed deposit investments.