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6BestChildInvestmentPlansinIndia|Myinvestmentideas.com

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June30,2014 SureshKP

6 Best Child Investment

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Plans in India
There are several parents
in India, who might be
thinking to have a best
child investment plan. I
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Ms.
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help with the best child

investment plan. She is

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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 onsite teams. If you are businessmen, you would

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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%.

AlsoRead:HowtoinvestinTopPerformingmutual
fundswhichcanhelpforyourchildfuture?
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
(ULIPs). 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 :

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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

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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

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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
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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 11th year onwards, he should be free
from spending money for child education. He would get Rs 2.34
Lakhs per annum from 11th year onwards for 10 years. What an
idea, Sir ji?

Also Read: How to create wealth by investing

inNationalSavingsCertificates(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. Dont 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.
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Suresh
Best Child Investment Plans in India

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OlderComments

Balaw
November14,2015at9:42am

Mr.Suresh
ThankYou
goodthinkgreattimereachtome..
onemoretimethankyoulot
iamnotfamiliarbankoranyfundsuknowstillnotyet
openmyinsurance.
iam32yearsold.
givemeideas.ihave1yearson.myplanbuyPPF.iam
lookingforwho.
http://myinvestmentideas.com/2014/06/6bestchildinvestmentplansinindia/

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Reply

SureshKP
November14,2015at10:49am

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)
ApproachfundsindiaorICICIdirectformutual
fund account. Start investing in SIPs in 35
schemes.YoucaninvestinICICIfocussedblue
chip fund, Birla SL Frontline fund, Franklin
India smaller cos fund, HDFC Midcap opps
fund etc., 3) Read my articles on various
investmnetoptions.Basedonyourriskappetite,
you can choose various investment options and
startinvestingit.
Reply

sagar
November9,2015at5:46am

Valuableinfoprovidedhere.Niceworkdone
ThankyouverymuchSureshsir
Godblessyou
Regards
Sagar
Reply

RV
November1,2015at8:05pm
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6BestChildInvestmentPlansinIndia|Myinvestmentideas.com

Nicepost..SomeofthepointswereverypracticalandI
think this is something every parent should think of
beforechoosingtherightinvestment.OnethingIwould
have liked to see is the tax implication of some of the
investment options, but hey Im a CA so I will always
expectthat
Reply

SureshKP
November7,2015at4:05am

Thanks RV. How is my blog. Do you find it

useful.Whatsuggestionsdoyougivetoimprove
our blog. If you found my portal useful, pls
recommendtoyourfriendsonyourfacebookor
twitter.
Reply

mihirshahh2014
October8,2015at12:13pm

good one blog on child investment plans..thank u soo

muchtobeshare.
Reply

Vinod
September25,2015at11:55am

Anyone interested in taking LIC policy please contact

me8892530474/9964108498.
Reply

Viren
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6BestChildInvestmentPlansinIndia|Myinvestmentideas.com

October4,2015at5:18am

Tellmeabestlicpolicyforchild.Invest1520k
perannum
Quotes
Mailmeat
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