Investment plans you can consider for your child
Pursued diligently, these schemes can build a handsome corpus for your child by the time he/she becomes an adult
If you are in early thirties and had a child recently, you should start saving for him/her. The sooner you can start, the easier to build a corpus.
Here are five best options for your child’s future, which can turn into a goldmine when your little angel turns adult, apart from guaranteeing the safety of the money.
Sukanya Samriddhi Scheme
The Sukanya Samriddhi Scheme (SSS) is an India government initiative that encourages parents to save for their girl child. The account can be opened at any post office till your daughter attains the age of 10 years.
The minimum deposit is of Rs 1,000 a year and the maximum deposit is Rs 1.5 lakh. It bears an interest rate of 6.9% now.
The deposits can be continued till your daughter attains 14 years and the maturity period of the account would be 21 years from the day of opening of account.
Investments in gold
Gold is always considered one of the safe investment routes both in good and bad times. Parents can make investments in gold in the form of ETF or E-gold or in gold mutual funds. Many buy physical gold too.
But experts usually advise that possession of physical gold entails risk and cost of storing gold.
However, it is also true that if your child is a daughter the gold might be of use during her marriage.
Recurring deposits
If you are looking for a low risk and periodic investment plan for your child’s future, then you can consider recurring deposits. The interest rates are not yet low.
Recurring deposits are offered by both banks and post offices. For example, an investment of Rs 1,000 per month can fetch you almost Rs 2 Lakhs after 10 years. RDs are also quite safe.
PPF
If you are looking for a long term and secure investment plan, choose a minor PPF account where the funds can be safely locked in for a period of 15 years.
A maximum of Rs 1.5 Lakh can be invested per annum and the rate of interest is 7.1%.
Minor PPF accounts can be opened through banks or post offices.
NSC
NSC or National Savings Certificate is a proven method of saving for your child’s future. National saving certificates can be bought for a period of 5 years and they can be reinvested on maturity.
The present rate of interest offered is 6.8%. One can buy a certificate with is as less as Rs 100.
There is no upper limit of investment but you can get tax benefits for a maximum amount of Rs 1.5 lakh a year.