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12/1/2015 6 Best Child Investment Plans in India | Myinvestmentideas.com
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6 Best Child Investment Plans inIndia
June 30, 2014 Suresh KP
6 Best Child Investment
Plans in India
There are several parents
in India, who might be
thinking to have a best
child investment plan. I
got a mail from Ms.
Neelima requesting to
help with the best child
investment plan. She is
worried about her 6 months child on how she can create a
good plan for his education. It is common that we all worried
about child education or money required to do a marriage for
our children (it is immaterial now whether you have a daughter
or son, the cost of marriage is more or less same). How to do
investment planning for your children? How we can secure
their future, even during our absence? In this article, I would
provide you about some of the best child investment plans in
India.
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Are Children Investment Plans necessary?
In this modern world, both husband and wife are working. You
start your day in the morning, go to the office, get into calls,
meetings, struggle to meet deadlines, targets, unnecessary
pressure from peers, etc. You would end up your long day by
supporting on‐site teams. If you are businessmen, you would
spend every minute without having time to breath and end up
coming back to home at 11 pm in the night. There is no time
for us to think about saving, planning nor about our health. In
such situation, it is better to have a plan for your child's
future. You should ascertain how much money you may need
for your child education or marriage based on current cost and
consider inflation of 5% to 7%.
Also Read: How to invest in Top Performing mutual
funds which can help for your child future?
How parents are doing children investment plans now?
While some parents are planning well for their children, some
of the parents are blindly taking Unit Link Insurance Plans
(ULIP’s). While insurance agents have been cheating investors
by selling ULIP plans which charge high allocation and admin
charges, due to lack of awareness, parents still believe this as
a good investment plan for their children.
6 Best Children Investment Plans in India
1) Consider Additional Term Insurance Plan and balance
savings invest in good investment options :
When I said term insurance plan, I am not saying you should
take term insurance plan in your child's name. This is an
additional term insurance plan you should take in your name
for protecting your child's future. E.g. if you think that it
would cost Rs 20 Lakhs for your child education in future or for
your child marriage in future, you can consider taking Rs 20
Lakhs additional term insurance. For 30 years of age, this
would cost you Rs 5,000 per annum. Consider taking it for 20
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year period after your child has born so that you can protect
your child till his education. Your savings can be invested in a
bank FD or mutual funds so that in case of death of parent,
additional term insurance would be useful, otherwise, your
savings would help in meeting child education or their
marriage goals.
2) Invest in mutual funds through SIP
If you want to create good wealth for your child education or
marriage in the future, one of the best ways is investing in
some of the best performing mutual funds. You can consider
investing in large cap funds and balanced funds. If you still
believe that mutual funds are high risk even in the long run,
try investing in balanced mutual funds. These are low risk
funds, comparing to others. Do you know that Rs 1,000 per
month invested through SIP in top performing mutual funds @
13% annualized returns can fetch you to Rs 2.5 Lakhs in 10
years or Rs 5.5 Lakhs in 15 years time frame. This is the power
of SIP in mutual funds.
3) Invest through Recurring Deposits (RD)
Another best and low risk option to create children investment
plan is to invest in recurring deposits. Since interest rates are
at peak now, one can lock recurring deposits at this rate and
create the best plan your children. Do you know that if you
invest Rs 1,000 per month in recurring deposit, you would get
Rs 2 Lakhs after 10 years or Rs 2.8 Lakhs after 15 years (9%
interest rate). Just imagine that if you can invest Rs 10,000 per
month, what would be the value of your investment.
4) Invest in PPF
Investment in PPF is one of the best way to lock your money
for long term of 15 years. PPF account can be opened for 15
years. You can invest Rs 1 Lakh maximum per annum and
expect 8.75% interest rate per annum. Do you know that Rs
100,000 invested in PPF per annum can fetch you a lump sum
12/1/2015 6 Best Child Investment Plans in India | Myinvestmentideas.com
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of Rs 31.30 Lakhs at the end of 15 years which is tax free? You
can have your child education done in a foreign university J
5) Invest in NSC
This is one of the best proven methods for child education
plan. One of my friends has told me this plan. He started
investing in NSC certificates (IX issue, maturity at 10 years)
every year for Rs 1 Lakh for tax purpose (80C) for 10 years. His
expectation is that from 11 year onwards, he should be free
from spending money for child education. He would get Rs 2.34
Lakhs per annum from 11 year onwards for 10 years. What an
idea, Sir ji?
Also Read: How to create wealth by investing
in National Savings Certificates (NSC)?
6) Invest in ULIP Schemes
While I am not in favor of ULIP schemes, if you are a low risk
investor and does not believe in stock market dependent
investment schemes, you can look for ULIP schemes which has
low allocation and less ULIP charges. You can expect 4% to 6%
annualized returns from any ULIP schemes. Don’t get into the
trap of insurance agents who promise returns higher than bank
fixed deposits or returns which they compare with mutual
funds and encourage you to invest in it. Investment in ULIP
schemes should be your last option among the other child
investment plans.
Summary: While I have provided some of the best ways, you
can consider them individually or in a combination to arrive
the best children investment plan which suits you. Take the
action today and create the best plan for your child education
or for their marriage in future.
Readers, how are you planning for your child's future now? Do
you think the above plans are the best ones?
If you enjoyed this article, share this with your friends and
colleagues through Facebook and Twitter.
th
th
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Suresh
Best Child Investment Plans in India
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72 comments
72 comments
BalawNovember 14, 2015 at 9:42 am
Mr.Suresh
Thank You
good think great time reach to me..
one more time thank you lot
i am not familiar bank or any funds u know still not yet
open my insurance .
i am 32 years old.
give me ideas. i have 1 year son. my plan buy PPF. i am
looking for who.
118Share
12/1/2015 6 Best Child Investment Plans in India | Myinvestmentideas.com
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Reply
Suresh KPNovember 14, 2015 at 10:49 am
Hi Bala, Since you even do not have insurance,
you need to start from basic in financial
planning 1) Take term insurance plan from
ICICI Pru life or HDFC Life. You can check for
what amount you need the insurance 2)
Approach fundsindia or ICICI direct for mutual
fund account. Start investing in SIP’s in 35
schemes. You can invest in ICICI focussed blue
chip fund, Birla SL Frontline fund, Franklin
India smaller cos fund, HDFC Midcap opps
fund etc., 3) Read my articles on various
investmnet options. Based on your risk appetite,
you can choose various investment options and
start investing it.
Reply
sagarNovember 9, 2015 at 5:46 am
Valuable info provided here. Nice work done…
Thank you very much Suresh sir
God bless you
Regards
Sagar
Reply
RVNovember 1, 2015 at 8:05 pm
12/1/2015 6 Best Child Investment Plans in India | Myinvestmentideas.com
http://myinvestmentideas.com/2014/06/6bestchildinvestmentplansinindia/ 7/8
Nice post .. Some of the points were very practical and I
think this is something every parent should think of
before choosing the right investment. One thing I would
have liked to see is the tax implication of some of the
investment options, but hey I’m a CA so I will always
expect that
Reply
Suresh KPNovember 7, 2015 at 4:05 am
Thanks RV. How is my blog. Do you find it
useful. What suggestions do you give to improve
our blog. If you found my portal useful, pls
recommend to your friends on your facebook or
twitter.
Reply
mihirshahh2014October 8, 2015 at 12:13 pm
good one blog on child investment plans..thank u soo
much to be share.
Reply
VinodSeptember 25, 2015 at 11:55 am
Anyone interested in taking LIC policy please contact
me 8892530474/ 9964108498.
Reply
Viren
12/1/2015 6 Best Child Investment Plans in India | Myinvestmentideas.com
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October 4, 2015 at 5:18 am
Tell me a best lic policy for child. Invest 1520 k
per annum
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Mail me at
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