As a parent, one of your primary responsibilities is to guide your children through various stages of life, ensuring their growth and development. Part of this responsibility includes financial planning to help them achieve their financial goals. This is especially crucial if you have a girl child, considering the evolving culture and traditions in India. To fulfill their financial needs, it’s important to invest in the right options for the necessary support. Here, we highlight the top 8 child investment plans in India that can help secure your child’s future.
1. Sukanya Samriddhi Yojana (SSY)
SSY is a government scheme designed to benefit girl children in India. The account must be opened in the name of the girl child, with minimum and maximum annual investments ranging from ₹250 to ₹1,50,000. The interest rate is between 7% and 8%, compounded annually. The policy matures when the girl child is married after 18 years or attains 21 years of age. One family can invest in up to two SSY accounts, saving on tax.
2. Children Gift Mutual Fund
The India Post Department offers this investment scheme to save funds for a girl child’s future needs. It is further classified into debt-oriented and equity-oriented hybrid mutual funds. Parents or guardians can invest in such schemes in the name of the minor child, considering factors like financial objectives, risk tolerance, and rate of return.
3. Unit Linked Insurance Plan (ULIP)
ULIP is a child insurance policy that provides life cover and market-linked returns on maturity. It offers options like equity, debt, and balanced funds, allowing you to save according to your risk appetite. You can also switch between fund options during an economic downturn.
4. National Savings Certificate (NSC)
The government sponsors NSC, a financial investment initiative that parents can open in the name of a minor child. The interest rate is 6.8% per annum, with a minimum investment amount of ₹1000 and a lock-in period of 5 years. The investment qualifies for a tax deduction under Section 80C.
5. Post Office Term Deposit
The India Post Department offers this investment scheme to save funds for a girl child’s future needs. The account can be opened by the parent or guardian in the name of a minor child, with a maturity period ranging from 1 to 5 years. The investment qualifies for a tax deduction under Section 80C.
6. Systematic Investment Plan (SIP)
As education costs rise, securing your daughter’s future becomes paramount. A SIP allows you to invest small monthly amounts, starting from Rs. 100 or Rs. 500, depending on the lender. This disciplined approach harnesses the power of compounding, building a substantial corpus over time. It instills a habit of regular investment, ensuring you meet your girl’s short and long-term financial needs.
7. Fixed Deposit (FD)
An FD is a popular investment option in India, allowing parents to open an account for their girl child. The returns are available when she turns 18 or upon maturity, providing a safe, zero-risk investment avenue. While interest rates are typically low, many banks offer specialized FDs for girls, making them an ideal choice for saving for higher education or marriage expenses.
8. Public Provident Fund (PPF)
PPF is a widely favored long-term savings scheme. Parents can open an account for their girl child with a minimum investment of Rs. 100, up to Rs. 1.5 lakh per financial year. With fixed returns and tax-saving benefits, PPF is a low-risk option for securing your daughter’s future financial needs.
CONCLUSION
Financial investments for children are the means to secure their future. It will help them lead a peaceful life and also accomplish their goals in the long term. Considering the traditional culture of raising a girl child, financial institutions in India offer a range of products to save a fund for their future. However, it is important to evaluate your financial requirements, affordable investment, risk appetite and the policy term for the investment to choose the right product for your girl child’s future well-being. And once you have chosen and purchased a product, stay invested in ensuring its benefits.
Remember, it’s never too early to start investing in your child’s future. Start planning today for a secure tomorrow!
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