Every parent dreams of providing a safe, secure, and bright future for their children. One of the ways that these goals can be achieved is through financial security. Whether it is to fund their education or a business, having a sum of money set aside can be a great help.
Luckily, several investment plans cater to this need.
As a parent or investor, you need to know available investment plans on the market. And, what suits you depends on your financial goals. Whether you want the money in the next five years or ten years, or twenty years can tell which plans would work best for you.
For example, the best fixed deposit plan can allow you to choose an investment period of a few weeks to a few years.
So, before you choose the investment plan, do some research and analysis about your financial goals and available investment plans. Let’s look at the best investments plans for your child in 2022 and how to pick the one that best suits your needs.
Six best investment plans for your children in 2022
Sukanya Samriddhi Scheme
This is an initiative by the Indian government that encourages savings for a girl child. An account can be opened through any post office. The minimum deposit is Rs 1000, and the maximum is Rs 1.5 lacs per year.
The maturity period is 21 years from the day of opening the account. The account can be opened when the girl is between 10 and 14 years. Certain schemes also allow partial withdrawals after the child attains 18 years of age.
You can invest a certain amount of money for a specific period through a fixed deposit. The rate of interest is based on the period for which the investment is made. You will get the best fixed deposit rates in India if you choose the longest maturity period.
You can also break your fixed deposit and make withdrawals before maturity. However, an amount would be deducted from your principal amount in such cases.
You can contact your bank to know about the best fixed deposit plan.
Equity mutual funds
Investment in equity funds allows you to invest for up to 10 or 15 years for a long period. The rate of annual returns is also relatively high, at an average of 12 to 15%.
Recurring deposits (RD) can be considered when looking for low-risk plans. An RD account can be opened both at post offices and banks.
You can also check the returns you should expect based on the monthly investment through an RD calculator available on their websites.
Public Provident Fund
When looking for a long-term investment plan, PPF can be an ideal option. It can be invested for up to 15 years. The minimum investment is 1 Lac per annum, and the rate of interest offered is 8.75%.
You can open your PPF account through post offices or banks.
National Savings Certificate (NSC)
NCS is considered a very intelligent investment plan for children’s education. It can be brought for a period of 5 years and can be reinvested once matured. The amount of investment, in this case, is Rs. 1 Lac per annum, and the rate of interest offered is 8.10%.
You can buy these certificates for less than Rs. 100.
Steps to follow while planning:
Plan your goal appropriately.
Decide your purpose. Are you investing for education, medical coverage, or marriage? Your investment plan should be based on your financial goals.
Consider the maturity period and returns.
You must think about what type of investment is needed to achieve your financial goals. Also, check out their maturity period and return on investment.
The early your start, the greater is the return.
If you start investing early, it can bring added benefits in the amount you receive at the end of the plan’s maturity. By starting early, you get more time to invest and remain invested. By the time your child grows up, you will have a good sum of money for them.
We have discussed all that you would need to figure out based on what suits you the best, your ability to save, and the period of maturity of your investment. For instance, if you’re looking for a long-term investment, you can check the PPF or an FD if the fixed deposit rates in India are favorable.
However, don’t forget that once you have invested in a scheme, it is not easy to pull out from it and invest in another scheme again. So, think well before you act!