It is not easy to plan for a stable future for a child. The majority of people try to provide a substantial financial cushion for their children, yet their funds are insufficient when they are needed. Making the appropriate investment selections at the right time is critical when trying to build a strong financial backup for the child.
While there are numerous best investment plans for children in the market, it is always advisable to select an investment choice based on the need and long-term viability. Let us learn more about some good child investment plans available in India.
Public Provident Fund
- Risk-free returns as the returns are not dependent on the market volatility.
- Interest rate is compounded.
- Income tax deduction u/s 80C of the Income Tax Act.
- Long-term investment for 15 years.
- Loans and advances are given against PPF balance.
- Investment as low as ₹500 can be made.
- Unlimited extension facility of PPF account in the blocks of five years upon maturity.
- Partial withdrawal facility from the seventh financial year onwards.
Mutual Funds
- It can give a decent profit if invested for a long term.
- Mutual funds are a type of investment that can be used in a variety of ways.
- It’s transparent and one can exit any time.
- It ranks high among the Children's Investment Plans because of the longer time frame of 10-15 years and the form of investment.
Fixed and Recurring Deposit
- Investing in a safe and secure manner
- Fixed-rate of interest
- Because the interest rate is modest and taxable, it is not a good choice for long-term goals.
Sukanya Samriddhi Scheme
- It can only be opened for a girl child.
- Exemption under Section 80C after a 21-year lock-in term.
- The account can be funded with a minimum of ₹250 and a maximum of ₹1.5 lakh per year.
Gold ETF
- Invest in electronic forms and you won't have to worry about theft.
- Purchase as little as 1 gram of gold on a regular basis to amass a significant amount.
- Capital Gains Tax Disadvantage and Risk When Selling + Gold Prices
A child entails a great deal of responsibility for parents. Every parent wants to provide the best for their children and ensure their future. You will be better prepared for many periods of your life if you plan ahead for your child's future.
The perfect plan would cover all of your child's important life events, such as education, higher education, health care, and even a wedding. These were just some of the ways in which you can do that but there are a lot more. So, start thinking and build a financially secure future for your child.
