Securing Your Child’s Future: A Guide to the Best Investment Plans

Pondering over the best investment plan for child future? There are quite a few options worth choosing in this case. What matters, however, is that you plan early for securing your child’s future. This means investing promptly through tailored and goal-oriented plans while balancing out market risks or fluctuations with steady returns. Here are some ways in which you can ensure higher financial stability for your little one in the future.

Best Investment Plan for Child Future – Top Choices

Finding the best investment plan for child future can be tricky if you aren’t careful. You should know that the portfolio should be a mix of high-risk and zero/low-risk options to give you steady returns for the future. Here are some options worth considering in this regard.

1. Child Plans- These are dedicated investment plans for your child’s future that you will find at several life insurance companies. They provide life coverage for the policyholder (typically the parent) throughout the investment period, ensuring that the child remains financially secure if anything happens to them. At the same time, you can choose investments in a variety of instruments as per your risk appetite to earn good returns down the line. Some child ULIPs allow partial withdrawals after a lock-in period of five years, enabling access to funds for specific milestones such as education fees.

• SIPs (Systematic Investment Plans)- You can invest in SIPs to achieve various goals. Have one goal attached to each SIP and invest according to your risk appetite, preferred tenure, and amount. SIPs are a structured way of investing in mutual funds, rather than standalone investment plans. If you ride out temporary market volatility and balance your portfolio with a mix of equity, hybrid, and debt funds, then you can amass good wealth in the long term for your child’s future requirements.

• SSY – The Sukanya Samriddhi Yojana is a Government-secured scheme for parents of girl children with lower risks. You can invest regularly, and the plan will mature 21 years from the date of opening the account. However, partial withdrawals (up to 50%) are allowed when your daughter turns 18, typically for her higher education and other needs.

• PPF- Public Provident Fund (PPF) investments can be made regularly, and they have a lock-in period of 15 years. If you start early, you can invest a sizable amount in this negligible-risk plan to get good returns (guaranteed by the Government). Also, these plans are highly tax-efficient, and you can partially withdraw after completing six financial years (from the seventh financial year onwards) to meet multiple costs.

• NSC- You can open the National Savings Certificate investment at your local post office. The maturity period is five years, and you can open the account on behalf of your minor child. However, a minor cannot open an NSC account independently. It must be managed by a parent or guardian until they turn 18.

• Gold Investments- You can hedge against inflation by investing strategically in gold funds and other assets. Gold investments have high liquidity but do not guarantee fixed returns, as prices fluctuate based on market conditions. Along with physical gold, you can invest in sovereign gold bonds (which have a lock-in period of five years) or exchange-traded funds (ETFs) for better portfolio diversification.

So, as you can see, there are several investment options that you can choose to secure your child’s financial future. All you need to do is zero in on the right balance of risk and reward to build a portfolio that gets the job done.