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While planning for your child’s future financial requirements, the earlier you start the better it will be. Starting investment earlier gives you a larger time frame to meet the financial goals you have set for your child’s education, marriage or future and it can even turn into a greater aggregate value.
Parents always need to have an idea of the corpus value which they will need for their child’s future and the approximate time when they will need it, depending on their plans for their child’s future. Selecting the right investment will help you progress towards the financial goals you have set for your child’s better future.
Here are a few ways to invest money for your child-
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Sukanya Samriddhi Yojana is a Government of India backed savings scheme targeted at the parents of girl children. The scheme encourages parents to build a fund for the future education and marriage expenses for their girl child. This account can be opened any time after the birth of a girl till she turns 10, with a minimum deposit of Rs 1,000 and a maximum of Rs 1.5 lakh can be deposited during a financial year. The account will remain operative for 21 years from the date of its opening or till the marriage of the girl after she turns 18. To meet the requirement of her higher education expenses, partial withdrawal of 50 percent of the balance is allowed after she turns 18.
Gold etf is an option that allows parents to invest in gold online.ETFs are open-ended mutual fund schemes that will invest the money collected from investors into standard gold bullion of 99.5 percent purity. These funds are open-ended in nature and trade on a stock exchange, just like the shares of a public company. By choosing gold ETFs, accumulation of gold for long term is easy and safe, plus there is no question of purity or the risk of storage of gold.
Buying a life insurance cover should be a critical component of your financial plan as you can name your family members and even your children or your spouse as a beneficiary of your insurance plan. A life insurance policy is basically a contract with an insurance company which provides a lump-sum payment, known as a death benefit, to beneficiaries upon the insured’s death in exchange for premium payments. It provides your children with a strong financial future and monetary needs, as and when they arise. The insurance amount can help pay for any immediate expenses, be it medical bills, home loan, EMIs or other monetary requirements.
Mutual funds have always been a very attractive investment method for investors because they are simple to understand and a great choice for investors with limited knowledge, time or money. It is necessary to invest in the diversified mutual funds for safer returns. Mutual funds are subject to market risks but, provide higher returns which beats inflation in the long run and helps you achieve your target. You can invest in SIP (Systematic Investment Plan) or directly invest a lump sum amount.
It is very important for parents to start teaching their children about money management from an early age. The same is applicable for the stocks, and the goal shouldn’t be much different. Though the stock market has a reputation for being volatile, investment in equities as an asset gives higher returns even after calculating inflation cost which will help meet your financial goals in the long term. The stock market can provide returns between 12% to 18% on an annual basis but it involves a higher risk.
It’s important to consider certain factors while planning investment like monthly investment amount, maturity dates, and risk factors. We recommend you to consult a financial consultant for guidance on various plans and policies that are available.
Image credits – Pixabay, Zeenews, Goodmoneying
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