Seeking Investment Options for Minors? Here's What You Should Do

Smriti, mother of 3 year-old toddler, Sania, is already worried about handling the huge expenses related to her daughter’s future. Coming from a middle-class background, Smriti has big dreams for Sania and is seeking investment options to start saving early for her daughter. Like Smriti, every responsible parent must be seeking investment options for child keeping in mind the rising expenses related to the children’s education and the ensuing expenses. Here we suggest some smart ways to help you get started on the path to securing your child’s dreams and aspirations.

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Investing in your child's future:A wise decision & a loving choice
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  • Insurer pays premium in case of loss of life of parent

  • Create wealth for child’s aspirations

  • Tax Free maturity amount+

  • 12+ plans available

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6.7 Crore
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Start Small, Invest in a PPF

If you start seeking investment options for child early enough, you do not need to make big investments. The best part about investing in a PPF while seeking investment options for child is that your investment can be as small as Rs 500 a year. Your lock-in period is 15 years, which leaves you with adequate corpus for your child at the end of the tenure.

The maximum investment you can make while seeking investment options in a PPF is Rs 1.5 lakh per annum. Also, as an additional perk, the amount that you receive at the end of the tenure is tax free. Also, you can open the PPF account while seeking investment options for child in the name of the minor to make the withdrawal process easier.

Consider Investing in Mutual Funds

Equity mutual funds can serve as a good investment option while seeking investment options,given that they have delivered an average return of roughly 16.5% annually in the past 10 years. Also, you can study the mutual fund market while seeking investment options for childand choose to invest in some stocks that have been performing well over the years. However, these investments are ideal if you have a larger risk appetite. If you do not want to venture into equity funds owing to the associated risks while seeking investment options for child, you can easily opt for an SIP for your child, which is low risk and is an ideal investment when you have adequate time in hand. If you make an investmentthrough a SIP in well-performing mutual funds while seeking investment options, you can gather nearly Rs 5.5 lakh over a 15-year tenure just by making a monthly investment of Rs 1,000.  

Investing in a Child Plan

Investing in a child plan is an ideal way to secure your child’s future by accumulating adequate corpus besides ensuring insurance as a safety net in case of the main breadwinner’s demise. You can make investments in traditional insurance policies or even choose Unit Linked Insurance Plans (ULIPs).

In the case of ULIPs, a portion of the premium amount goes into equity instruments and the rest into debt instruments. However, if you do not want to venture out too much while seeking investment options, you can stick to a traditional insurance policy, which will provide you adequate coverage for your minor child’s education, medical expenses, coverage in case ofdemise of either of the parents, and also act as a suitable collateral for loans taken for higher education.

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Invest ₹8K/Month YOU GET ₹80 Lakhs* For Your Child View Plans
Invest ₹5K/Month YOU GET ₹50 Lakhs* For Your Child View Plans
Standard T&C Apply *

Invest in Recurring Deposits (RD)

If you are looking to make a safe and low-risk investment while seeking investment options, an RD is one of the best options. It can help you accumulate a significant sum over a period of 10-15 years, giving you returns at an interest rate of 9%. These features make an RD an ideal investment for long-term goals set for minors while seeking investment options for child.

Child Savings Plan vs Sukanya Samriddhi Yojana Scheme and Public Provident Fund

Investing for Short-Term Goals

While most of the above mentioned options are for long-term investing, if you are looking to make short-term investments while seeking investment options, you can always choose from bond funds, short-term funds, fixed deposits and the likes. Also, you can invest in a 1-year RD when you want to match an immediate need of your child.

The key to reap the best returns on investment for minors is to invest early, which gives you adequate time to accumulate wealth. So take your pick from a host of options available in the market.

*All savings are provided by the insurer as per the IRDAI approved insurance plan.
*Tax benefit is subject to changes in tax laws. Standard T&C Apply
#The lumpsum benefit is calculated if policyholder invested ₹10000 monthly for 10 years in the fund with a policy term of 20 years. This Point To Point past performance data of last 10 years has been used to illustrate a scenario for the customers benefit. It is assumed that the past 10 years returns would have also been delivered in last 20 years. This is not guaranteed and not in anyway indicative of what the customer may actually get 20 years from now. The investment is subject to market risk and the risk is borne by the policyholder.
+Returns Since Inception of LIC Growth Fund
~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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