The cost of living is rising day by day. It is no longer possible to keep up with routine expenses relating to a child’s upbringing. This requires a serious approach to financial planning for your child. You can define your child's future goals and choose an investment option accordingly. Opening a fixed deposit for your child is a beneficial solution for their future requirements. It is the most secure investment which offers a sturdy return on investment.
Read moreNothing Is More Important Than Securing Your Child's Future
Invest ₹10k/month your child will get ₹1 Cr# Tax-Free* on Maturity
There are two ways through which you can open a fixed deposit for your child – online and offline. Both the online and the offline processes are explained below.
It is very easy to open a fixed deposit for your child online as it saves time. You can also benefit from additional perks such as easy payments, easy renewals, and closure. The process may vary with different banks and financial institutions. Different banks have different methods on their websites to open a fixed deposit account.
Given below is a standard procedure to do the same.
Visit the website of the bank or Non-Banking Financial Company with which you want to open a fixed deposit account. The choice of a bank or NBFC should be up to your preference and suitability.
Register yourself using basic details such as full name, email ID, contact information, etc., required in the given fields.
The next step is to log in using your registered ID.
Go through the page and click on the option which would let you open a fixed deposit account.
At this point, you would be asked to provide more details regarding your preference of principal amount, account tenure, and nominee. Fill in all these details which are necessary to take the process further.
Confirm all the details which you have provided and proceed towards the online payment option.
Make your principal amount payment through net banking.
In the end, you should download the receipt of the online payment for future reference.
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If you do not have access to an online platform to open a fixed deposit for your child, you can do so offline. The offline process does not require you to be an account holder in the concerned bank.
The first step would be to visit the nearest branch of the bank or NBFC of your preference.
Ask for a fixed deposit application form.
Fill up the fixed deposit application form accurately.
In case you do not have an existing account in the bank, you also have to provide documents proving your identity and residence to complete your KYC.
Submit all the necessary documents required for opening a fixed deposit.
Submit the form along with the documents to the bank representative.
Every bank and NBFC has a distinct set of eligibility criteria for opening a fixed deposit account for minors. The basic criterion is given below.
If you fall under any one of the following categories, you are eligible to open a fixed deposit.
Indian Resident
Non-Indian Resident (NRI)
Senior Citizens
Minors
Sole Proprietorship
Partnership Firms
Limited Companies
Societies
Clubs
Hindu Undivided Family (HUF)
If you already have an account in the bank, you do not have to re-submit the following documents for opening a fixed deposit account for your child. If you are a new investor for the bank, you have to submit the following:
Identity Proof: For identity proof, you can submit your Aadhaar Card, Voter ID, PAN Card, driving license, photo ration card, senior citizen ID card, etc.
Address Proof: For address proof, you can submit your utility bills, bank statement with cheque, an identification card issued by the Post Office, etc.
Fixed deposits for your child are a reliable way to secure their future financially. A fixed deposit offers financial assistance with low risk. They help you increase your savings with the help of a predefined interest rate. Fixed deposits allow you to withdraw your investment at the time of maturity when your child is an adult and needs those funds.
†Policybazaar does not endorse, rate or recommend any particular insurer or insurance product offered by any insurer. This list of plans listed here comprise of insurance products offered by all the insurance partners of Policybazaar. The sorting is based on past 10 years’ fund performance (Fund Data Source: Value Research). For a complete list of insurers in India refer to the Insurance Regulatory and Development Authority of India website, www.irdai.gov.in
*All savings are provided by the insurer as per the IRDAI approved insurance
plan.
^The tax benefits under Section 80C allow a deduction of up to ₹1.5 lakhs from the taxable income per year and 10(10D) tax benefits are for investments made up to ₹2.5 Lakhs/ year for policies bought after 1 Feb 2021. Tax benefits and savings are subject to changes in tax laws.
#The investment risk in the portfolio is borne by the policyholder. Life insurance is available in this product. The maturity amount of Rs 1 Cr. is for a 30 year old healthy individual investing Rs 10,000/- per month for 30 years, with assumed rates of returns @ 8% p.a. that is not guaranteed and is not the upper or lower limits as the value of your policy depends on a number of factors including future investment performance. In Unit Linked Insurance Plans, the investment risk in the investment portfolio is borne by the policyholder and the returns are not guaranteed. Maturity Value: ₹1,05,02,174 @ CARG 8%; ₹50,45,591 @ CAGR 4%
+Returns Since Inception of LIC Growth Fund
¶Long-term capital gains (LTCG) tax (12.5%) is exempted on annual premiums up to 2.5 lacs.
~Source - Google Review Rating available on:- http://bit.ly/3J20bXZ
^^The information relating to mutual funds presented in this article is for educational purpose only and is not meant for sale. Investment is subject to market risks and the risk is borne by the investor. Please consult your financial advisor before planning your investments.
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