For every parent, their child means the world to them. They would be happy to sacrifice their own comfort, just so their child can be comfortable. Considering this, it is hardly surprising that every parent wishes to provide their offspring with the best of everything in life, even when they may not be around. When it comes to planning for your child’s future, an early start can make all the difference. Starting the saving process earlier gives you a longer time period to fulfil the financial goals you are aiming to meet, such as your child’s education, marriage, or supporting them in the initial stages of their career.
Planning forms an important part of any investment process. Whether it is for a short or long period, you must plan the investments which you think will be suitable in helping you reach your financial goals. Another important part of the investment process is saving. You must calculate the amount which you think will be sufficient for taking care of your child’s needs. There are a number of investment options which can help you build a secure financial future for your child. These are:
Stocks are a relatively long-term investment which, despite being considered unstable, can help you achieve your long term financial goals.
It is widely known that compared to a traditional savings bank account, a fixed deposit offers a relatively higher rate of interest on capital. Opening a fixed deposit account is easy and almost every leading public and private bank offers this facility. Currently, fixed deposit rates range from 5.75% to 6.75%.
Unit Linked Insurance Plans (ULIPs):
One of the most affordable type of investment is a ULIP (unit linked investment plan) which offers dual benefit of insurance cover along with an investment avenue. Under ULIPs, one can choose from a range of funds to invest in, such as equity funds, money market funds, hybrid funds, debt funds, etc. ULIPs are another option for a long-term investment.
When it comes to your responsibility towards your dependents, including your children, a life insurance policy is no short of a necessity. Under a life insurance policy, your dependents/beneficiaries will be provided with a sum assured death benefit in the event of your untimely demise. This amount can be utilized to take care of immediate expenses like loan repayments, children’s tuition fee, etc. Minor children can also be named as beneficiaries under a life insurance policy.
Endowment plans are more or less like life insurance plans, the only difference being that they also allow you to make savings over a specified time period. If the life assured individual survives the policy term, they will receive an assured lump sum maturity amount which can be utilized towards fulfilling upcoming financial requirements like paying children’s tuition fees, investing in child plans, etc. If the assured policyholder dies before the policy matures, the sum assured maturity amount will be provided to their beneficiary.
Mutual funds or SIPs (systematic investment plans) are a popular investment option, especially for those who are not very savvy with investing or are short on time, or money. Being relatively simple to understand, mutual funds exchanges are done on a large scale, which allows investors to reap benefits that are greater compared to the investment costs. A SIP can be stated with a minimum investment of as low as Rs.500.
When it comes to investing, there are certain things which one must keep in mind in order to reach their financial goal. Details such as plan maturity dates, premium due dates, or investment amounts must be monitored. When planning to invest, it is advisable to consult an expert who can advise and guide you regarding the plans which are most suitable for your child’s needs. Planning is at the very heart of the investment process which can help you overcome any hurdles which you may face on the way to fulfilling your investment goals and thereby securing your child’s future and happiness.