Fees for streams like medicine, engineering, management, or studying abroad are rising so rapidly that mere savings are no longer sufficient. Proper investments make a real difference. If your child is young, you can start with a small amount and build a substantial corpus over time. The only thing you need to do is decide which option you want to invest your money in: safe returns or significant growth. Let’s find out which option best suits your needs.
PPF
The Public Provident Fund (PPF) has long been considered a reliable investment because your hard-earned money is safe and the interest rate is determined by the government. It is ideal for parents who prefer a risk-free approach. Its lock-in period is 15 years, making it an excellent option for long-term goals like your children’s education.
Consistent investments can build a substantial corpus by maturity. It currently offers an interest rate of 7.1 percent. Investments can start with a minimum of ₹500 per year, with a maximum limit of ₹1.5 lakh. Even after maturity, the account can be extended in 5-year blocks, and tax benefits are also available.
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Mutual Fund SIP
If you want to build a substantial corpus for your children’s education, a mutual fund SIP (Systematic Investment Plan) is a wise choice. Returns depend on the market, so there is risk involved. However, compounding significantly reduces this risk. Over a period of 10 to 15 years, a SIP can grow rapidly and make it easier to meet major expenses.
The ability to start with a small investment and increase the amount each year makes it even more beneficial. This is an excellent option for parents who can tolerate some market fluctuations and have a long-term perspective. The market will fluctuate, but there are equally growth opportunities.
Sukanya Samriddhi Yojana
If you have a daughter, the Sukanya Samriddhi Yojana (SSY) is one of the most profitable schemes. It is completely safe and currently offers a high interest rate of 8.2 percent. This account is opened in the name of a daughter under the age of 10. The investment period is 15 years, and the account matures at 21.
A minimum of ₹250 and a maximum of ₹1.5 lakh can be deposited per year. The returns can cover a significant portion of the daughter’s higher education. It also offers tax benefits, and there is no risk involved. Therefore, this plan is considered excellent for parents looking to build a future fund for their daughters.
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