Protect your child’s future educational ambitions with 5 steps that you take today – read on to know more.
Your child’s dreams are precious to you. Their slightest wish is your command, but you are also a little worried because some of their dreams are about to cost a lot of money!
Higher education is prohibitively expensive in India, and it keeps getting costlier. However, with spiralling education costs that are growing at a higher than the inflation rate, it is important that you plan today for their future. After all, when it comes to securing the future of your children, you do not want to leave anything to chance – so we present 5 options to ensure that you don’t fall short in making your kid’s dreams come true:
- Buy a child plan. The first thing to do is to look up the best child insurance plans in India. A child plan secures your child’s future by building a large corpus of money over a series of several years. When your child attains the age of 18 years, the child insurance policy matures and you can use the money for their higher education. The USP of the child plan is that the policy remains active even if you are unfortunately absent from your child’s life in the future. When this happens, the insurer waives off the remaining premiums but keeps the policy active. Some of the best child insurance plans in India come from Aviva Life Insurance. Moreover, the payouts are structured to be released at specific intervals to suit his/her educational requirements.
- Start a minor’s savings bank account. Since your child is still quite young, a good way to set aside money for their higher education is to save towards it every month. Suppose you set aside Rs 10,000 per month till your child turns 18 years of age. This way, you will have saved a big amount of money that can propel your child’s future. Leading banks offer minor’s savings accounts that you can deposit money in whenever you like. You can even invest the savings fund in a suitable option to grow its size.
- Invest in a PPF account for your child. Another long term, reliable investment option for your child is the PPF (Public Provident Fund) account. The PPF has a total maturity tenure of 15 years, with a lock-in of 7 years. You may invest as little as Rs 500 or as much as Rs 10,00,000 in it per year, and earn on the investment via interest payable. Partial withdrawals are also possible after the lock-in period is complete.
- Open a mutual fund in your child’s name. Another good avenue to create sufficient wealth for your child is to open a mutual fund in their name. These are classified as ‘Special Situation’ mutual funds and are offered by leading fund houses in India. They invest in both debt and equities to offer high returns with low risk. The longer you stay invested, the better the returns on the fund.
- Buy a term plan.This is life insurance that you take on yourself so that your child’s future ambitions are not derailed in your absence. Though the child insurance policy you buy will safeguard your child, the term insurance money will also help in the event of your unfortunate demise.