Best investment plan for child future: While doing financial planning, one should always make a solid decision about the future of children. This is because when the children grow up, you do not have any money problem for their higher studies or marriage. At present, there are many options in which investment can be started keeping in mind the future of the children. It has options like FD, PPF, SSY, Mutual Fund. Let’s know about 4 popular investment options
Public Provident Fund (PPF)
You can also invest for a better future of your children through Public Provident Fund (PPF). PPF account can be opened in the name of children only by their mother, father or legal guardian. PPF account can be opened for children below 18 years of age. The current interest rate on PPF is 7.1 percent per annum. PPF account matures in 15 years. An investment of Rs 1.5 lakh can be made in this annually. If you are a parent of 2 children, you can invest up to Rs 3 lakh by opening separate PPF accounts. After 15 years, you can withdraw the entire amount from the account at once. After that it can be extended for another 5 to 5 years. Tax exemption is available on investment in PPF.
Sukanya Samridhi Yojana (SSY)
Sukanya Samriddhi Yojana (SSY) is a better option for the future of girls. In this, the parent or legal guardian of any girl child can open this account till the age of 10 years. Sukanya Samriddhi Yojana account can be opened in any official government bank and post office branch. At present, the interest rate on this is 7.6 percent per annum. Account can be opened in Sukanya Samriddhi Yojana for just Rs.250. Under the scheme, a minimum of Rs 250 and a maximum of Rs 1.50 lakh can be deposited annually. Tax exemption can be availed under section 80C on investment in Sukanya scheme. One has to invest in SSY till the completion of 15 years from the day of account opening. But this account matures on completion of 21 years. In this, withdrawal can be done after the daughter turns 18 or after passing 10th.
Fixed Deposits (FDs)
Fixed Deposits (FDs) are a traditional and popular investment option in the country. One reason for this is that you can do FD in a period of 7 days to 10 years. Also, it can be easily withdrawn from it in case of emergency. The parents or legal guardians of the child can start investing in these with a deposit of Rs 100 and Rs 500 in multiple banks. SBI is currently offering 2.90 percent to 5.40 percent interest on FDs (7 days to 10 years).
Mutual funds can also be a better option if you think a little aggressively while doing financial planning keeping children in mind. You can also buy mutual funds for minor children. It can be used for their further studies or career. For the long term, you can invest in mutual funds in the name of children with the help of your financial advice.