Saving Schemes: Every parent dreams of their child having a secure and bright future. Financial planning to fulfill this dream may seem a bit daunting, but with a systematic and disciplined approach, you can easily create a strong financial foundation for your children. Choosing the right investment option is extremely important to achieve financial stability and growth in the long term. There are many great investment plans available in India to secure the future and growth of children. Let us talk about some of the most amazing options in detail today.
Sukanya Samriddhi Yojana
Sukanya Samriddhi Yojana is a special savings scheme backed by the Government of India, which focuses exclusively on the financial security of daughters. This scheme is designed for parents or legal guardians whose daughter is below 10 years of age. After opening this account, it matures on completion of 21 years or when the daughter gets married after the age of 18.
Currently (till 2025) its interest rate is 8.2%, which increases as compound interest is compounded annually. In this, you can deposit from ₹ 250 to ₹ 1.5 lakh annually. Most importantly, this scheme also offers tax exemption under Section 80C of the Income Tax Act. It is a great option for higher education and the marriage of daughters.
Public Provident Fund
PPF is another reliable and government-backed long-term investment option, with a current interest rate of 7.1%. Its interest rate varies every quarter. The interest received on the deposit amount in it is completely tax-free. The contribution made in it also gives the benefit of tax deduction under Section 80C. With a lock-in period of 15 years, PPF is a great scheme for long-term goals like higher education for children.
National Savings Certificate
NSC is a fixed-income investment option with a maturity period of five years. It offers variable interest rates that are revised from time to time and also offers tax benefits under Section 80C. It offers safe and fixed returns. The interest earned is reinvested, making NSC a safe option for accumulating funds for children’s education.
Unit-Linked Insurance Plans
ULIPs are a great mix of insurance and investment. A part of the premium goes towards life insurance, while the rest is invested in equity or debt instruments. ULIPs have a lock-in period of five years and offer high returns depending on market dynamics. These also offer tax benefits under Section 80C. However, it is important to review the associated charges and risks before investing.
Mutual Fund SIPs
Systematic Investment Plans (SIPs) make it easy to invest regularly in mutual funds, which promotes financial discipline and provides the benefit of compounding interest over time. This option is completely based on the philosophy of the stock market. The risk is slightly higher than other options, but it can give great returns in the long term. Mutual funds reduce the risk by investing in different companies.
Bank FD
Bank FDs continue to be a popular option for investors today, especially because of their safety and assured returns. The interest rates offered are usually lower than market-linked options. Special FDs for children can help meet their upcoming educational expenses and needs, as they lock in money for a fixed period and give a stable return.