New Delhi: Some of the best child investment plans available in the country are Sukanya Samriddhi Yojana, Unit Linked Investment Plans (ULIPs), Child Mutual Funds, Public Provident Fund, etc. Through a child investment plan, the parents or guardians would be able to accumulate a huge corpus in the long term. They can use the corpus to fund higher education and marriage expenses of their child. Let’s see which are the most popular and best child investment plans and how much money one can aim to accumulate over the course of a set period of time.
Best Child Investment Plans
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Sukanya Samriddhi Yojana
Sukanya Samriddhi Yojana (SSY) is one of the best girl child investment plans in India. Currently, investors get highest interest rate on SSY than in any other small savings schemes of the government of India. For April-June quarter (Q1) of the financial year 2024-25 (FY25), the GoI has set SSY interest rate at 8.2 per cent. The parents or guardians of the girl child can use the SSY investment corpus to fund higher education and marriage expenses of their daughter.
Child ULIPs
There are a plethora of child ULIPs offered by insurance companies in India. Along with high returns, the investor also gets tax deduction benefits under Section 80 of the Income Tax Act, 1961 on premiums paid in ULIPs. The child gets dual benefit of insurance and investment in such an investment avenue.
Child Mutual Funds
Child Mutual Funds have grown in popularity of being one of the best long term investment plans
for children. The parents can invest in such types of mutual funds via Systematic Investment Plans (SIPs) to accumulate a huge corpus over a period of time.
Debt Mutual Funds
Debt Mutual Funds are lower risk investment options as compared to equity linked mutual funds. Instead of volatile stock market, the money is invested in debt securities. Debt funds provide fixed income and are apt for risk savvy investors.
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Public Provident Fund
Public Provident Fund (PPF) is one of the most traditional and secured child investment plans. The lock in period is 15 years. In Q1 FY25, the GoI kept PPF interest rate unchanged at 7.1 per cent. Along with a reasonable corpus and security cushion, the investor also gets tax benefits of up to Rs 1.5 lakh under the Section 80C on PPF investment
Fixed Deposits
Parents or guardians have historically opted for Fixed Deposits (FDs) as one of the most reliable child investment plans in India. One should opt for FDs of longer tenure like of 10 years period as child investment plans.
Life Insurance
Life Insurance policies especially endowments are popular child investment plans in India. Such policies come with maturity benefits that can be used to fund education expenses of the child. Premiums paid in life insurance policies also qualify for income tax deductions under Section 80C.
Gold
Gold has been a safe haven for investors. The yellow metal has proven to be a safe capital appreciation tool for long-term investors. Nowadays, there are many forms of gold investment like sovereign gold bonds, Gold ETFs, Digital Gold, etc. in which parent or guardian of a child can invest in. When, the child grows up, the parent can sell the gold investments and use it to meet various financial expenses of their child.
Bonds
Bonds are fixed income instruments in which parents of a child can invest in for capital appreciation over a set period of time. These offer lower risk than equity-based investments. Plus, bonds also give higher return than fixed deposits.
Real Estate
Investing in real estate has also been one of the most go to investment options for citizens. According to a study, real estate constitutes around 70 per cent of aggregate physical savings in India. Along with capital appreciation, parents/investors could also get rental income on real estate investment. They can use the rental income to fund the current education expenses of their children.
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Some of the best child investment plans include the likes of Sukanya Samriddhi Yojana, Unit Linked Investment Plans (ULIPs), Child Mutual Funds, Public Provident Fund, etc. Personal Finance Business News – Personal Finance News, Share Market News, BSE/NSE News, Stock Exchange News Today
