If you want to make a decision for your children which is going to help them in the long run — be it to fund their education or marriage, then you need to have some good financial schemes in place. If you invest wisely now considering these financial goals for your children, then you can secure a sound future for them.
However, it is not very easy to do so — considering the ever-skyrocketing costs of education, along with other expenses. So, you can start slow — take one step at a time — so that your wealth builds up over time, and you have a significant corpus by the time you need it.
Here, we will look at four investment options for children that you can consider making their future a financially secure one:
Don’t be misled by the ‘Insurance’ portion of Unit Linked Insurance Plans (ULIPs). They are much more than simple insurance policies. They not only offer you the option of a protective insurance cover, but also facilitate investment in equity or debt funds. With ULIPs, you have the best of both worlds, an insurance policy that provides comprehensive financial security to your child in the event of an untimely death as well as investments that can generate substantial returns over the course of the policy term. What’s more, you can even avail tax benefits on the premiums you pay for ULIPs. On Finserv MARKETS, you can avail a special ULIP Child Plan, that’s designed specifically to ensure your child’s education, marriage, dreams and ambitions are well taken care of your child’s financial needs in your presence or absence. You can invest in a whole host of top-rated funds in the country which ask for zero allocation charges and that can yield returns of up to 11% over the course of a 5 year investment period.
Equity Mutual Funds have turned out to be a popular investment option for one’s children, as they have had a history of generating high returns — as high as 12-15 percent annually. With a good Systematic Investment Plan (SIP), you can spread out your investment over a long period of time in fixed instalments so that it does not become a financial burden for you. With a good mutual funds plan, you can make sure that your children have an excellent financial future assured for them.
Gold is one such metal that always has an edge above other financial measures at volatile times. Having gold ensures that your kids are always financially secure in a time when the market is undergoing lots of fluctuations.
However, make sure that the investment portfolio for your kids is not overburdened with gold — it should not exceed 10 to 15 percent of your portfolio if you are storing it offline. However, if you are buying online gold, then you can increase the margin of your online gold investment as you do not have to worry about storage and other forms of charges.
This deposit scheme is applicable to a girl child; an account can be opened anytime from when they are born until the time they are ten years of age. You have the option to invest a minimum of Rs 1,000 and a maximum of Rs 1.5 lakh. The maturity period of the policy is 21 days from the time of opening and currently attracts an attractive interest rate of 8.3 percent per annum. Partial withdrawals are allowed under the policy after the child attains 18 years of age. Besides, you also get to claim tax exemptions under Section 80 C of the Income Tax Act. Overall, this acts as a great investment option for girl children.
It is essential to get a good term insurance plan to make sure that your child is protected against any unforeseen events of the future. Even though you may want to rule out any chances of mishaps, these incidents tend to happen, and it is always a good idea to protect your kid’s future. While opting for a cover, keep certain things like education, marriage, and living expenses in your mind.
Along with the points mentioned above, you can also make it a must to your kids the concept of financial planning and the value of money.