On Children’s Day, you should take decisions for the future of your children. So let us tell you today in which scheme you can invest and how much benefit you will get in which scheme.
Sukanya Samriddhi Yojana
If you have a daughter, Sukanya Samriddhi Yojana (SSY) is a safe investment option that offers assured returns. It also comes with the benefit of EEE tax regime (exempt-exempt-exempt), which ensures that the maturity proceeds are completely tax-free. Sukanya Samriddhi Yojana (SSY) accounts are offering an impressive compound interest rate of 8.2% per annum for the quarter from July 1, 2024 to September 30, 2024. The interest rate on SSY accounts is reviewed and updated every quarter, making it one of the most competitive rates available in small savings schemes.
People who have a 5-year old daughter can get an estimated maturity amount of around Rs 55.61 lakh in Sukanya Samriddhi Yojana after 21 years by investing Rs 1.2 lakh annually (equivalent to Rs 10,000 per month) at an interest rate of 8.2% per annum. Is. The total amount invested will be Rs 17.93 lakh, of which the interest earned over a period of 21 years will be Rs 37.68 lakh.
If the investment amount is increased to Rs 150,000 then the maturity amount is expected to reach Rs 69.8 lakh, of which the total interest earned will be Rs 47.3 lakh and the initial investment will reach Rs 22.5 lakh.
NPS Vatsalya Fund
For parents looking to secure their child’s financial future beyond education, the National Pension System (NPS)-Vatsalya can be a suitable solution. This scheme allows parents to invest in the name of their children till they turn 18, with the aim of creating a corpus for their long-term needs. Like standard NPS accounts, PFRDA also oversees this scheme.
Just like regular NPS accounts, parents have the flexibility to choose from different pension fund managers and choose between active or auto investment options. The maximum allocation to equities, which is a potentially high-return but risky asset class, is limited to 75%.
Parents have the option to start investing in NPS Vatsalya Yojana with a minimum monthly contribution of Rs 1,000, with no maximum limit. The account will remain under their management until the child turns 18, after which ownership of the account will be transferred to the child. The interest rate for this scheme has recently ranged between 9.5% to 10%.
specific mutual fund
Mutual funds for children are special investment plans designed to help parents save for their children’s future needs, such as education, marriage and general well-being. These funds prioritize ensuring that children’s education expenses are covered, even if costs increase over time. Some plans also offer a lump sum payment when the child reaches a certain age, which can help parents meet tuition and related expenses.
ICICI Prudential Smart Life Plan offers a lump sum payment at the end of the child’s life for education, in addition to life insurance.
HDFC Life YoungStar Udaan helps parents fund their child’s future education, while also providing financial security.
Public Provident Fund (PPF)
The PPF scheme is a government-backed long-term investment option aimed at promoting savings and wealth growth for individuals. It offers investors attractive interest rates and promising returns on their investments over time.
One of the main benefits of the PPF scheme is that the interest earned and accumulated returns are not subject to taxation under the income tax laws of the country. This makes it a tax-efficient investment option for individuals looking to secure their financial future.
With a minimum tenure of 15 years, the PPF scheme can be extended in blocks of 5 years as per the investor’s wish. The investment limit for PPF allows a minimum investment of Rs 500 and a maximum of Rs 1.5 lakh per financial year. Investors have the facility to invest in lump sum or in maximum 12 installments throughout the year.
bank fixed deposit
Parents have the option to open a fixed deposit (FD) for their children by nominating themselves or their partner as the guardian. Some banks offer special FD schemes for children, which can provide higher returns on investment. Examples of child-specific FD schemes launched by Indian banks include PNB Balika Shiksha Yojana, PNB Uttam Non-Callable Term Deposit Scheme, Yes Bank Fixed Deposit for Child and SBI FD for Child.
Bajaj Finance Fixed Deposit offers multiple tenure options ranging from 12 to 60 months, giving investors the flexibility to align their investment tenure with their financial goals for their child. This allows investors to match the FD tenure with specific milestones such as college admission to plan effectively for the future. Senior citizens also benefit from higher interest rates of up to 8.65% per annum, making it an ideal option for grandparents looking to contribute to their grandchildren’s future.
Child Savings Schemes
Child savings plans are designed to facilitate long-term wealth accumulation. These plans offer the benefit of both investment growth (equity, debt or hybrid funds) and life insurance coverage, allowing parents to create an adequate fund for their child’s future. Max Life Online Savings Plan – Variant 2 emphasizes high-growth potential by focusing on equity funds to help establish a financial base for your child’s education or other future needs. Bajaj Allianz Life Smart Wealth Goal V – Child Wealth focuses on mid-cap equity funds, which have the potential to generate high returns over the long term.