Fortunately, there are several child investment plans that can deliver considerable returns in the long run. Seven such top options are as follows-
1. Direct Equity InvestmentEquity markets are known to outperform all other types of investments in the long run. But the high returns potential comes with considerable risk. Make sure that you have adequate knowledge about the equity markets if you are considering it for your child.
2. Mutual FundsCurrently, one of the most popular investment options in India is mutual funds. For long-term goals like child's education, you can consider investing in equity mutual funds. You can start investing with as little as Rs. 1,000 per month.
3. Public Provident Fund (PPF)Another excellent investment option for long-term goals is the Public Provident Fund. Your investment in PPF earns a fixed rate of interest (currently 7.9% p.a.). It has a lock-in period of 15 years, but you can increase the tenure further in blocks of 5 years.
4. Gold SavingsGold too is a proven long-term investment option. But rather than going for physical gold which comes with a lot of risk and additional expenses, consider Gold ETFs (Exchange Traded Funds) or SGB (Sovereign Gold Bond). These are electronic variants of gold.
5. Child Life InsuranceThese are invest-cum-insurance plans that help you build a corpus for your child while also offering life coverage. So, the best child insurance plan will help you ensure that the financial needs of your child are well taken care of even in your absence.
6. Bank Fixed DepositBank FDs are also very popular in India for the safety and risk-free returns they offer. Some of the banks now also offer 5-year FDs. On maturity, you can renew your FD (principal + interest) for long-term capital growth.
7. Sukanya Samriddhi Account (SSA)For a girl child under 10 years, Sukanya Samriddhi Account (SSA) can be a great choice. It generates fixed returns (currently at 8.50% p.a.) on the deposit every year. The minimum deposit amount is only Rs. 250 and the maximum amount is Rs. 1.5 lakhs for a fixed tenure of 21 years.
Making a Decision
There is no shortage of investment plans that you can consider for the future of your child. To decide, consider factors like your age, risk appetite, investment tenure, available capital, and child’s age and ambition.
You can always consult a professional financial planner to help you make the decision.
Learn more about our online life insurance plans.
The information contained herein is generic in nature and is meant for educational purposes only. Nothing here is to be construed as an investment or financial or taxation advice nor to be considered as an invitation or solicitation or advertisement for any financial product. Readers are advised to exercise discretion and should seek independent professional advice prior to making any investment decision in relation to any financial product. Aditya Birla Capital Group is not liable for any decision arising out of the use of this information.
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