Financial planning for children: Every parent naturally wants to secure the future of their children. For this, it may seem difficult to do financial planning, but in a systematic and disciplined way you can easily do a better planning for your children’s future. It is extremely important to choose the right investment option to achieve financial stability and growth in the long term. Various investment schemes are available for securing the future of children and growth in the country. Let’s tell about some of the best options:
1. Sukanya Samriddhi Yojana (SSY)
SSY is a savings scheme supported by the Government of India, which especially focuses on the financial security of girls. Parents or legal parents can open this account for a girl under 10 years of age. This account matures after 21 years or after the girl turns 18 to marry. At present, its interest rate is 8.2% by the year 2025, which increases as an annual compound interest. It can be deposited from ₹ 250 to ₹ 1.5 lakh annually. The most important thing is that this scheme is also exempted from tax under Section 80C of the Income Tax Act.
2. Public Provident Fund (PPF)
PPF is a long-term government-supported investment option, which has a current interest rate of 7.1%. Explain that its interest rate varies on a quarterly basis. The interest received from the deposited amount in this is completely tax -free, and the contribution made in it is also benefited by tax deduction under Section 80C. PPF with a 15-year lock-in period is a tremendous scheme for long-term goals such as Higher Education.
3. National Savings Certificate (NSC)
NSC is a certain income investment option with a maturity period five years. It provides competitive interest rates that are periodically modified and also get tax benefit under 80C. The earned interest is re -invested, making NSC a safe option to deposit money for the child’s education.
4. Unit-Linked Insurance Plan (Ulips)
Ulips are a mix investment option of insurance and investment. In this, a part of the premium goes for life insurance, while the rest is invested in equity or debt means. Ulips have a five-year lock-in period and high returns are likely to be based on market performance. They provide tax benefits under Section 80C. However, it is important to review the related fees and risks before investing.
5. Mutual Fund SIPS
Systematic Investment Plan (SIPS) makes regular investment easier in mutual funds, promoting financial dysiplin and benefits from time to time. By the way, let us tell you that this option is completely dependent on the performance of the stock market. The risk is slightly higher than other options.
6. Bank Fixed Deposit (FDS)
Bank FD remains a popular option for investors even today due to safe and assured returns. However, the interest rates available in it are usually lower than other market -related options. By the way, special FDs for children can help meet their upcoming educational expenses and other needs.
How to choose the best option?
Before choosing any investment option, it is very important to understand the risk, returns and lock-in periods of each option. Including many options in its financial planning reduces the risk and helps maximize returns. By understanding these schemes, by choosing the best option for yourself, you can ensure a safe financial future for your child.