The key success for Investing for a child is to start from the day the child is born. In India, we have an array of products in which we can invest. Let’s have a look at five Investment products in which we can invest for our child:
✅ Ppf – public provident fund, is a long term investment with the maturity of 15 years and can later be extended for 5 years. Though the returns aren’t great, we have guaranteed returns and the rate for each financial year is decided by govt. You can open an account in the name of a minor with the parent as guardian. Also part of the 80c tax exemption, a good choice to lock your funds for the long term.
✅ Ssa – If you are the privileged parents of a girl child, Sukanya Samriddhi account is a must. The rate of interest is more than PPF and again has guaranteed returns. The account can be opened in the name of a girl child below the age of 10. Deposit in this account will happen till the child completes 14 years but withdrawal can happen at 21 years of age completion only. Though you can withdraw 50% amount at the age of 18 for education purpose.
✅ Sovereign gold bonds – As a parent, we always invest in gold for kids. RBI now has brought sovereign gold bonds (paperless gold) which you can keep for the long term of 8 years. Replacing the physical gold, you earn 2.5% interest every year with no fuss of keeping the gold in the locker.
✅ Term plan: the best Investment you can do for your child is insuring your life. Keeping your child as nominee and making a trust/guardian for the fund in case you expire, will ensure that your child has financial backing even if you don’t survive.
✅ NSC: national savings certificate available in the post office is part of 80 c Investment. Lock in for 5 years, it is Indian govt saving bond, with assured returns. Rate of interest decided by govt, these instruments are a low minimum investment. Investment can be done for a minimum of 100 Rs.
Apart from Investment, the best thing you can invest is having a proper health plan.