Ways to invest in Child’s future & Education (Child Plan)

If you are newly parent and you are already feeling tensions & stress about the child future education and career along with the money required for it, then you are at the right place. Because in this blog I am going to discuss education planning which can be helpful for your child. If your child is between 5 to 10 years then you need to start planning for their education. Because as the budget is increasing in India with 6% every year, it will become too difficult for most of you to afford your child education.

If we look at the current scenario, if someone wants to become an engineer or want to gain some other degree then it takes minimum 4 – 5 lacs to get the degree for such courses. Now, for the same education, you can imagine what could be the cost after 15-20 years. The entire amount will get double by that time. I am also an engineer, and as per my experience, if I include every minute expenses of my 4-year engineering program like tuition fee, college fee, books etc. the entire expenses is around 8.5 lacs and this is the current status. Now, after 15 – 20 years, for the same course one needs to pay around 13- 14 lacs.

Now, to take the proper steps towards this upcoming situation, I am going to share the best 3 secure investment with you all. I won’t confuse you all by sharing many investment plannings. Like when we search on google regarding best child plan, it shows many options and makes you confuse as which child plan is better for your kid. According to me, these are the best 3 child plans for your child future investment. So, you can also consider these three as the best investment plans and choose any one of them for your child future.

Here, before sharing the child plan, I would like to share the most important factor regarding the investment in a child plan. As I mentioned many times in this blog, that you need to do the secure planning for your child. Secure planning means if you have decided that your child wants to become an engineer or doctor, so what could be the requirement of money after 15-20 years. That you need to keep in mind, otherwise at that point of time, you will feel helpless which eventually lead to spoiling your child career. So you need to invest in child plan with the plannings and make it a secure investment.

1. PPF (public provident fund):- You can go ahead with this option of investment for your kid, whether they are planning for their career or education or not, but you need to open a PPF account on their name. This scheme is run by the Post scheme which starts from the minimum Rs. 500 per annum to maximum 1,50,000 yearly. And it is not necessary that you can open PPF account for your kid only, you can open PPF account for yourself also. If we talk about the benefits of PPF then,

1)      Tax benefit

2)      Loan Benefit

3)      Secure Benefit

4)      Secure Return

5)      Compounding

6)      Withdrawal Before Maturity.

2) Sukanya Samriddhi Yojana for Girls:- This child plan is specifically for girls and has been too popular in its initial days and is still popular these days. This child plan is designed for your girl child who needs to be below 10 years of age. When it comes to investment, you can start investing in this child plan with a minimum amount of Rs 250 to the maximum amount of Rs. 1,50,000 yearly. Presently it provides interest with 8.5%. Under this child plan, the government takes guarantee of full return which provides the surety that your money will not go anywhere and you will get it when it comes to your need. About the key feature of this child plan, when your daughter will complete 18 years, then you can withdraw 50% amount for her higher education. Or in case you need money for health or anything, then also you can withdraw the money at any point in time, you just need to provide the affidavit along with the medical report. The account maturity is after 21 years, for example, if you have opened this account at the age of 1 year, then the account maturity ends at the age of 22 years. That’s the only drawback of this child plan that the maturity date will be after 21 years. So, it is better to invest in this child plan as soon as possible so that you will get the matured amount at the time when you need it most.

3) Mutual Funds:- The third investment child plan is Mutual fund. There are various types of mutual funds some are risky and some are not. The reason for keeping Mutual fund here for child plan is that the return in Mutual fund is way better than any other investment child plan. It has been recorded that people had taken 15 – 20% of interest for long term investment in child plan which his only possible through Mutual funds.

Here, the suggestion for you all goes for the long term mutual fund investment, so that you may experience the better return of your investment in these child plans. In case, you have no knowledge regarding mutual funds, then you need to first do some research for the mutual fund and find out which is the best mutual fund investment for your child plan. I would suggest you check out the child plans offered by Kotak MF, they are offering the best child plans which are easy to invest and provide good returns.

Under the mutual fund, your investment money goes to the institute and then that institute uses your money and re-invest in other mediums to get the better returns of your money. This is how mutual funds work.

So, these are the three important options for investing in a child plan. Hope, this blog has helped you in choosing the correct child plan for your child future and education.