Girl Child Savings Plan For A 12-Years Old

Let’s look at what your options are.

Which Plans To Buy For A 12-Year Old Girl Child?

The government-backed small deposit account for girl child, Sukanya Samriddhi Yojana, is out of question given that the age criteria for the child is 10 years or below. However, there are tons of other options that will earn you similar interest rates and possibly higher returns. Ideally, a 12 years girl child savings plan can include standalone child plans, savings deposits, investment cum insurance options, or a combination of all of these.

ULIP based child plans along with a term insurance plan can cover all the bases for you. ULIPs can earn you higher returns along with tax saving benefits. The entire fund value at the end of the policy term is offered to the girl child. The term insurance cover can help your family financially in your absence through the death benefit proceeds. These two plans can offer the stability and the funds required for a girl child to reach financial independence without much hassle.

Benefits Of A Girl Child Savings Plan For A 12-Year Old

If your child is 12 years old, it is the right time to start saving as you will have a good 6-7 years before the actual cost of education starts. Pursuing a technical degree from a private institution will cost you big chunks of money, therefore starting now would be the best thing for you and your daughter.

1. Beat inflation to finance expensive higher education

   Higher education in general has turned into an expensive affair. A lot of girl children have been dropping out of schools and colleges owing to this. Couple that to the cost of education abroad, tuition fees, accommodation, you can expect to incur anywhere between 20-25 lakhs per child, depending on their choice of field. Girl child investment plans can help you beat inflation and grow enough funds through investments in the equity market.

2. Financial protection on the death of a parent

   Moreover, life is uncertain and no one can guarantee long-term stability. Should anything were to happen to you, your child should not have to struggle for finances to finish their education or other pursuits. In such cases, term insurance protection can help significantly. There are special child plans that offer financial respite to the children following the death of their parents. Several plans such as child ULIPs waive off future premiums in such cases.

3. Pay off debts and other liabilities

   As a parent, you should plan your finances in a way that your child does not have to bear the burden of your debts. A 12 year old girl child should focus on her studies and interests rather than paying for a household or getting a job. A decreasing term insurance plan in sync with your outstanding loans or a savings plan with a cover equal to the debt amount can help you negate this risk.

How To Plan For A 12-year Old Girl Child’s Future?

There are certain things you should be mindful about before buying a policy for your 12-year old girl child.

1. Identify your child’s interests

   It is important that the child is nudged towards their interests and not be pushed into fields they are not comfortable in. Whatever their dreams are, you should plan a budget that accommodates varying interests. This will ensure that you do not run out of funds if they were to choose a more expensive degree.

2. Decide on a budget

   Many child savings calculators allow you to estimate the amount of corpus you would need to comfortably fund your daughter’s needs. These can be used to further estimate the premiums payable against the desired sum assured. Factor in all your other investments and savings and find out which plans fit your budget.

3. Consider the current rate of inflation

   Note that the current rate of education inflation is 10%. The interests on regular savings deposit accounts do not efficiently cover the inflation rate. As such, you should look for high return investment options that allow you to reach your goals in a shorter time frame. The best child investment plans come with enough flexibility to grow your wealth and protect your child’s future.

4. Diversify your investment portfolio

   Investments are subject to market risks and are borne completely by the investor. If you need high returns but want to balance out the risks, consider diversifying your investments into low and high risk funds. Child ULIPs serve this purpose as they come with a range of fund choices and flexible investment strategies.

5. Keep aside funds for emergencies

   Your death should not impact the financial future of your daughter. Be sure to invest in term insurance plans to give them a safety net to fall back on in your absence. Set aside separate funds for each of your children and have contingencies in place to take care of outstanding loans, debts, liabilities.

Girl child savings plan for a 12 year old is important to reach your goals and offset the high costs of education required for your daughter to be the best version of herself. The best girl child investment plans will offer comprehensive cover along with returns but should be bought after careful research.