Four investment options every parent should think of

Parents always want to invest in the future of their children. There are so many expenditures like education, marriage, etc., that you need to prepare for your kids. However, each goal has a different time frame, so parents should cautiously choose the appropriate investment to reach the goal. If you want to give the best to your child, then you should start thinking as soon as possible. The sooner you start investing; the better returns would be for your goal.

What is a child education plan?

A child education plan helps in following the educational pursuits of your child. Such plans come with opportunities using which you can maximize your savings. The plan ensures that you and your child both don’t struggle for capital when it comes to attaining the higher studies of your child. You can use the child education calculator available online to calculate the money that you need to save to secure the future of your child.

Here are the few long term child investment plans that will help you in making your child’s future bright and secure:

a. Child insurance plan — A child insurance plan gives a lump sum amount to the child in the case when the policyholder dies. In addition, all the future premiums are waived off, and the insurance company keeps on investing the money on behalf of the policyholder. Once the child attains a certain age, he will be given money according to the policy.

b. Mutual funds — Mutual funds are not as risky as equity funds, and they also give higher returns than other schemes like post office saving schemes and fixed deposits. This is the reason why they are an excellent investment option for parents who want to earn dividends so that they can offer a bright future to their kids.

c. PPF/ debt fund/fixed deposit — Public provident fund is the most popular tax saving plan, which can be done through post offices or banks. The interest rate of PPF is not market-linked, and you can invest one lakh yearly using this scheme. PPF matures in 15 years, but you can also extend it for five years after maturity.

Fixed deposits are another way of getting a return as you get the regular income monthly or quarterly by the interest received on the deposits. It is a safe investment, but it can fail with the rising inflation.

d. Stocks and ETFs — Stocks are a risky investment, but they give the highest return in the long term, and it’s a liquid investment. ETFs are also like stocks. ETFs hold assets like commodities, stocks, and bonds. Using ETFs, you can invest in entire countries and sectors. It is a cost-effective and transparent way of investing your money.

With expensive higher studies, you need a solid child educational plan. Good education means a good livelihood which your child needs when he grows up. So saving for your child’s education at the right time is very important for his future.