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This Children's Day, gift your child a secure future. Check 5 best child investment plans

Children's Day 2019 Special: ​Parents always are in search of better investment plans to provide their child with a secure future. Amid growing inflation and economic slowdown, parents should invest in childcare plans that offer greater returns. Experts say that Childcare plans of mutual fund houses fare better than traditional investment plans.

Priya Jaiswal Priya Jaiswal @jaiswalpriyaa
New Delhi Updated on: November 14, 2019 15:00 IST
This Children's Day, gift your child a secure future; check

This Children's Day, gift your child a secure future; check 5 best child investment plans

Children's Day 2019 Special: ​Parents always are in search of better investment plans to provide their child with a secure future. Experts say that Childcare plans of mutual fund houses fare better than traditional investment plans. Also, it is important to secure your child's education, expenses in case of your sudden demise, financial crisis and other such emergencies. So, these Children's Day we take a look at 5 best investment plans to secure your child's future. 

PPF Account for Minor

PPF (Public Provident Fund) is one of the safest investment schemes that offer complete income tax exemption for about 8% returns. It is the perfect long-term investment vehicle so far as the debt category is concerned, making it an effective savings tool. PPF is a 15-year scheme where parents can build a corpus for your child's education. The current interest rate on PPF is around 8 per cent by far beats interest rates of banks, which are at 7.5 per cent.

Equity Mutual Funds

India Tv - This Children's Day, gift your child a secure future; check 5 best child investment plans

This Children's Day, gift your child a secure future; check 5 best child investment plans

Mutual funds have been the first choice for investors looking for a long time investment solution for the children's secure future. For a big return, parents can invest 80-100% in equity mutual funds and the remaining in the debt mutual funds, however, it all depends on individuals risk tolerance. As it is not possible to invest big amount and even it is risky, individuals can start a SIP in two-three diversified multi-cap equity funds along with two short-term debt funds.

Debt Mutual Funds

A debt fund invests in fixed-interest generating securities like corporate bonds, government securities, treasury bills, commercial paper and other money market instruments; based on their credit ratings. One can invest in short-term debt funds and medium-term debt funds.

As new investors are investing in aggressive hybrid schemes or large-cap mutual funds, that invest 65-80 per cent in stocks and 20-35 per cent in debt. This is considered as ideal investment schemes as a mixed portfolio helps to reduce the overall risk and volatility.

Sukanya Samriddhi Yojana

Sukanya Samriddhi Yojana (SSY) is a small deposit scheme for the girl child launched by the government of India as a part of the 'Best Bachao Beti Padhao' campaign. This scheme comes with a maximum tax benefit of Rs 1.5 lakh with an attractive interest rate of 8.4%, under section 80C of the Income-tax Act. Also, the interest accrued and maturity amount are exempt from tax. 

LIC – Child Career Plan

The Child Career plan by LIC is designed to meet the increasing educational and other needs of children. It provides the risk cover on the life of a child not only during the policy term but also during the extended term. In this plan, the money comes in instalments and a major amount comes only after the child has attained 18 years of age. The premiums can be paid regularly at yearly, half-yearly, quarterly or through salary deductions over the term of the policy, either for 6 years or up to 5 years before the policy term. 

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