Child investment plans: As a parent, it is a constant struggle to always make the best decisions for your child.
From providing them with the best education to doing everything in your power to secure their future.
For almost anything and everything, one truly important thing is to stay financially stable at all times while also making sure that you save up enough for the future.
Thus, some Child Investment Plans can have a very vital role to play in such situations.
They are more or less a Child Plan Insurance, specifically formulated to help you secure financial value for the future.
To tell you more about it, we have mentioned everything about the best Child Investment Plans in 2022 including their significance and key elements.
So if you are someone looking to apply for the Best Children’s Plan for your kid, make sure to read this post till the end.
What are Child Investment Plans?
Child investment plans are essentially financial policies that aim to secure the future of your child.
You can invest in the bright future and adequate well-being of your child very easily given that you are their parent or guardian of course.
With the Best Child Education Plan, you can secure all their future educational expenses without worrying too much about your financial situation.
Any other expenses related to health or marriage can also be covered using this Children’s Plan.
Different Types of Child Investment Plans
These Child Investment Plans can either be pure investment policies or a perfect combination of Child plan insurance plus investment.
Both these kinds will nonetheless need you to make regular investments religiously for giving rise to the final amount.
However, in the second type of plan (Child Plan Insurance + Investment), the parent will be paying a premium amount.
On the other hand, this amount will be called a SIP amount in case of a 100% investment policy.
Why Child Investment Plans?
It is crucial for any parent to rightfully invest in the future of their child. This is one thing that no parent wishes to compromise on.
The best part about these Child Investment Plans is that it curtails the financial load of the parent to a great extent.
This is because the parent will simply be making this investment in small installments from an early period.
And eventually, when the time comes, they will have an adequate amount ready with them.
Moreover, in an unfortunate series of events, if the parent loses their job or dies, their child is going to stay covered with sufficient financial aid.
By choosing the Best Investment Plans For Child, it is not only the child who gets benefited but also the parents.
The parent will be able to maintain a separate portion for their child, away from their regular expenses.
This way, they won’t have to compromise on their daily needs or luxuries as they would already be saving up a reasonable amount for their child.
Moreover, with a nice Children’s Plan, you will also be provided with tax benefits on your investment.
The returns however may be taxable according to the provisions stated under Income Tax Act.
Best Investment Plans for Child
The following are the two Best Investment Plans For Child in 2022:
- Systematic Investment Plans (SIP)
SIP, which stands for Systematic Investment Plan is often regarded as the Best Plan for Child Education.
It allows investments of regular and minor amounts into Mutual funds.
When you are investing through the SIP, the amount is going to be automatically deducted from your provided savings account.
The principal amount and due date will be specified right from the beginning.
As investing in any best Child Plan is a long-term deal, you can go on to invest in Mutual funds.
Whether it is for educational purposes or marriage expenses, you will be able to generate an adequate fund for your child.
Opting for a goal-based investment plan is going to help establish a corpus for your kid.
Goal-based investments are tools that automatically work to calculate the required fund when the predefined period ends.
Mutual funds, over the past few years, have offered considerable returns.
Moreover, these returns are inflation-beating! So a SIP investment will help to generate an adequate corpus for your children.
And since mutual funds don’t have a lock-in period, you can always choose to have a partial withdrawal.
You will also be able to use a SIP calculator for calculating returns from your investment.
- Sukanya Samriddhi Yojana (SSY)
If you are looking for the Best Policy For Girl Child, Sukanya Samriddhi Yojana is your best choice.
This scheme was launched under the government’s campaign “Beti Bachao, Beti Padhao”.
The Indian government integrated this Best Policy For Girl Child with the major objective of securing their future. It ensures returns with the prevailing rate of interest being 7.6%.
The parents can have the SSY account opened for their child in any nearby post office or authorized bank.
One family will be able to open only two accounts at maximum. However, if the girls are twins, then three SSY accounts are allowed.
For opening an SSY account, the girl’s age needs to be at least 10 years old or below.
The lock-in interval is by the time the girl reaches 21 years of age.
The minimum amount of investment for this scheme is ₹250 while the maximum is ₹1,50,000 per year.
This scheme is only going to cover the educational or marriage expenses of the girl child.
Moreover, under Income Tax Act, investment in this scheme will be eligible for up to Rs 1,50,000 of tax deduction per year.
Partial withdrawals will be allowed once the child is 18.
Half of the amount will be available for withdrawal when the child has to study for her higher education.
Premature withdrawals will be allowed in case of the unfortunate death of the child or if she requires financial aid for the treatment of any medical illness.
Apart from this, a great thing about this Best Policy For Girl Child is the SSY calculator.
Through this, you will be able to calculate returns from the SSY scheme.
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Unit Linked Insurance Plans (ULIP)
A Unit Linked Insurance Plan or ULIP is a special product of investment plus insurance.
A life insurance firm offers this plan that is full of long-term investment choices.
The policyholder (parent/guardian in this case) will be able to pay the premium on a monthly or yearly basis.
With this plan, you not only get insurance but also a great opportunity to invest.
In case the parent/guardian dies, the insured amount will be transferred to the specified nominee child.
Any future premiums will also be waived off.
Moreover, a considerable sum will be paid to the child’s majority so that their future does not get compromised during this time.
Companies offering Child Investment Plans
If you are looking for some more banks or institutions offering the Best Investment Plans For Child, the following are a few great options that you can go for:
1. Young Assurance By Bajaj Allianz
Bajaj Allianz has one of the Best Child Plans to offer. Their policy is a standard Child Plan Insurance where the child needs to be at least 18 years old to sign up for this plan.
The maximum age limit is 50 years old. The maturity age is 28 years minimum and 60 years maximum.
Moreover, the insured amount will be 10x the yearly premium amount.
Different options for the policy term include ten, fifteen, as well as twenty years.
One can pay the premium amount on a per month basis, quarterly basis, half annual basis, or annual basis.
2. Bharti AXA Life’s Child Advantage Plan
Many customers consider it to be the Best Child Plan because of a couple of maturity benefit choices that come along with Bharti AXA Life’s Child Advantage Plan.
These include the endowment benefit as well as the money-back benefit.
This Best Child Education Plan also has the option of foregoing the benefits.
In case the parent unfortunately dies, the insurer will go on to pay the specified amount of premium which means that your child stays covered with this Best Child Education Plan.
The term of this policy can be anywhere from 11 to 21 years.
3. SL Youngstar Super Premium by HDFC
This is not only a Child Plan Insurance but also life insurance.
It is one of the best Child Investment Plans that will offer sufficient financial aid to your child.
It has a couple of payment options that include: Save Benefit as well as Save-n-Gain Benefit.
4. Pru Smart Child’s Regular Premium by ICICI
The PruSmart Child Plan by ICICI is a standard plan that requires you to pay regular premiums.
In case the parent dies, the firm will also offer a considerable amount to the child along with future premiums.
It also provides insurance against any kind of disabilities or accident as well as a specific fund for covering major educational expenses of the child. Partial withdrawals will be allowed.
5. New Children’s Money Back Plan by LIC
The New Children’s Money Back Plan by LIC is another great choice for Child Investment Plans.
The objective of this policy is to offer survival benefits to a large number of children so that their educational or marriage expenses stay covered.
The insurance also comprises death payments along with many maturity as well as survival rewards.
Documents needed for Child Investment Plans
For investing in Child Investment Plans, the parent or guardian will need to provide the following list of documents:
- Age proof: Date of birth certificate, Passport, etc.
- Address Proof: Passport, Aadhar Card, Electricity Bills, Water Bills, etc.
- Identity Proof: Aadhar Card, Passport, etc.
- Income Proof of the parent
Can a Child also make Mutual Funds Investments?
A child (assuming that he/she is below 18 years of age) will be able to make Mutual funds investments with the help of a parent or/and guardian.
The parent/guardian will need to and will be able to regulate the investment of the kid till the time he/she is 18 years old.
Post that, the guardian will not be able to operate the same.
All the prevailing investments will however resume unless the kid urges to terminate them.
Moreover, the child will also have to submit a request for changing their status from minor to major, preferably as soon as possible.
Things to consider while choosing Child Investment Plans
Before you decide on your Child Investment Plans, make sure to check out the following aspects thoroughly and consider them well enough when making a comparison:
- Policy term
- Your personal investment goals
- Returns offered under the specific scheme
- Any associated expenses
- Tax benefits
- Risk factors
Which is the Best Plan for Child Education?
We understand that it may be a huge dilemma to decide on the Best Child Education Plan when planning to invest in the future of your child.
This is simply because of the large range of policies available out there that offer some common as well as some different features.
However, this is a decision that only you can rightfully make for your child.
You must check out different policies available and compare their features.
Only after then, you must choose the Best Child Education Plan that satisfies all your needs and preferences.
For instance, the SSY scheme that we mentioned above is a great option for parents with a girl child.
But if you don’t like to have a lock-in period, then you can consider investing in Mutual funds instead.
So you must first be sure of what you are looking for and then choose the right fit for yourself.
No parent can even think of jeopardizing the future of their child and especially their education.
By investing in any Best Plan for Child Education, you will be able to plan for the future and secure enough financial funds for your child.
This will help to maintain the adequate well-being of your child while covering their educational or marriage expenses.
You can choose from a range of Child investment plans mentioned above.
Some things to keep in mind when deciding on your Best Plan for Child Education include the premium amount, returns, term, among others.
So make sure to consider everything thoroughly and only then invest in the right plan.
After all, this is another thing you wouldn’t like to jeopardize.
Frequently Asked Questions
Do Child Investment Plans come with any age limits?
The age limit on your Child Investment Plan can vary across different institutions and their policies.
In the case of mutual funds, the parent will be able to invest in their minor child. For SSY or Sukanya Samriddhi Yojana, the parent will be able to invest for their girl child only if she is 10 years old or below which means that the maximum age limit for the SSY scheme is 10 years.
In the case of ULIPs, the parent will be able to invest for the child only till they are 18 years old. This will be the maximum age limit for such Child Investment Plans.
Will I get access to some tax benefits for investing in Child Investment Plans?
Yes, the majority of Child Investment Plans will provide you with tax benefits. Parents or guardians who consider this an important factor must try investing in ULIP policies or the SSY scheme.
These two plans certainly offer tax benefits to the investor under the government’s Income Tax Act.
Are a beneficiary and a nominee different?
Well, in a general sense, a beneficiary and a nominee are different. On one hand, the beneficiary is someone with an interest in the investor’s life. Generally, they are the investor’s legal hires.
A nominee, on the other side, is someone who the investor himself appoints for taking care of all the finances in case the investor dies. However, the majority of cases have the same person as the beneficiary as well as the nominee.