Investing in a child’s future is the best gift one can give them. Your child can achieve their dreams and ambitions with the correct child investment
Investing in a child’s future is the best gift one can give them. Your child can achieve their dreams and ambitions with the correct child investment. There are several investing options available to safeguard your children’s future, and choosing the ideal child investment plan may not be easy.
While most investments, such as gold exchange-traded funds (ETFs) and equity mutual funds, can be bought for the children’s benefit, some are only for their education and marriage. Every scheme will be unique in its structure, features and methods of operation. It’s important to understand how to invest in them to help them achieve their long-term objectives.
As Children’s Day 2024 is drawing near, here are some government schemes to secure your child’s financial future:
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Sukanya Samriddhi Yojana (SSY)
It is a government-sponsored savings scheme for small deposits that Prime Minister Narendra Modi launched in 2015. As part of the Beti Bachao Beti Padhao campaign, this scheme helps parents or guardians pay for their girl child’s expenditures. SSY’s main objectives are to support girls’ interests in study and lessen the financial strain of marriage.
Public Provident Fund (PPF)
If you already have a PPF account in your name, you can open another one in your child’s name. The maximum amount that can be deposited into both the parent and minor accounts in a single year is Rs 1.5 lakh. In addition to your account, open a PPF child account in your child’s name and continue to make contributions to both.
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Balika Samridhi Yojana
In 1993, this plan was initiated. Girls born into BPL households, or those living below the poverty line, are eligible to receive benefits from this programme. The government pays for all of their costs under this plan, from the daughters’ birth until their schooling. Under this initiative, a woman who has a daughter, will receive Rs 500 financial help following the daughter’s birth.
National Savings Certificate (NSC)
The NSC is a fixed-income plan that is easy to open with any post office and saves income tax. It is an initiative of the Government of India. An NSC account must be opened with a minimum investment of Rs 1,000 and a monthly contribution in multiples of Rs 100. NSC accounts do not have a maximum investment limit. Anyone can choose to invest in an NSC, including children ages 10 and up. Parents or legal guardians may also make investments on a minor’s behalf.
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Kisan Vikas Patra (KVP)
In 1988, India Post launched Kisan Vikas Patra as a small savings programme. This was primarily implemented to help people develop long-term saving habits. Parents or legal guardians may apply on behalf of a minor, and any Indian citizen who is at least 18 years old is eligible. There is no upper limit on the investment, and a minimum of Rs 1,000 can be made. The amount invested would double during the 115 months, and it would be possible to withdraw the same amount after the period.
ULIPs for Children
Child ULIPs, also known as unit-linked insurance plans, are specifically acquired for children. In addition to insurance coverage, these plans include investment opportunities to help accumulate money for the child’s future needs. There may be five-year lock-in periods for child ULIPs. Before choosing a term length, think about how long you’ll need the coverage. Popular terms are 20 or 30 years. Based on the chosen fund type, the funds are distributed across debt and equity securities.
