Parents invest money for their children for major
events such a higher education, marriage and for a better lifestyle. Every
parent wants to give the best to their child and secure their future even
before they’re born. Most parents start saving for the future of their children
immediately after their birth and some even start before that.
Saving for your child is a very crucial step in
childcare. It should be done precisely after studying the market, the risks,
the benefits and all other aspects related to a savings
plan. Every option has some pros and cons and should be taken into
consideration before starting investing in savings plan.
Here are some of the options to look at for securing
your child’s future:
1.
Child’s
Saving Plan: A child insurance plan gives a
lump-sum amount to the child in-case of the death of the policyholder. This
also results in waiving off all the future payments of the premiums. The
insurance company continues investing money on behalf of the policyholder. The
child is given parts of the investment from time to time according to the terms
of the policy. There are also plans that concentrate specifically on education
in-case of the death of the parents.
2.
Endowment Plans: An endowment plan is
a life insurance policy that
provides life coverage along with an opportunity to save regularly over a
specific period of time so that your nominee can receive a lump-sum amount on
the maturity of the policy. Subsequently, one can use this maturity benefit to
fulfill their various financial needs like funding their children’s education,
saving for retirement, buying a house, children’s wedding etc. An endowment plan
not only provides maturity benefit, but in-case of death of the policy holder,
the child also receives the full sum assured amount.
3.
Public Provident Fund (PPF)/ Fixed
Deposit (FD): PPF is the most popular tax-saving and long term investment plan.
The interest rates are dependent upon the market now. One can even invest up to
Rs.1 Lakhs in a year. It matures in a period of 5 years but you can extend it
every 5 years after its maturity date. Fixed deposits can give you regular
income by the interests on the amount that are made every month or every
quarter.
4.
Stocks and EFT’s: Stocks are risky
assets but they have many advantages over other investment options so if you
are willing to take the risk stocks give the highest return over the long term.
It's a liquid investment. ETF’s are much like stocks. Through ETF’s, you can
invest in entire countries or sectors. These are transparent and cost effective
investments.
These are some of the option which you can opt
for securing your child’s future.
