Investment plans: At present, most parents are finding it challenging to manage the costs of high school fees, uniforms, and expensive textbooks. The yearly increase in school fees adds to the financial burden, and the rising costs of college and technical education fees only make it more difficult. To ensure a better future for your child’s education, it’s crucial to start preparing early by investing in options that offer better returns in the long run. We have outlined some investment plans to help cover your child’s educational expenses. You can choose one according to your needs and savings.
1. Child ULIP
To meet the expenses of children's education, you can start investing in a Child ULIP (Unit Linked Insurance Plan). This plan offers disciplined investment, high insurance coverage, and the benefits of the equity market. The Child Education Plan (ULIP) matures when the child turns 18, and the sum assured is paid out to the child upon the death of the parent or their legal guardian.
2. Endowment Plan
In this plan, stable returns are provided on the sum assured in the form of bonuses. This type of plan provides guaranteed returns as well as life insurance coverage. These plans usually make four payments equal to 25% of the sum assured along with the applicable bonus after the child turns 18. Like endowment plans, these plans usually come with regular returns from time to time. It is often suggested as a great option for long periods, such as more than 10 years.
3. Sukanya Samriddhi Yojana
In this scheme, you can invest by opening an account in the name of your girl child below 10 years of age. You can open an account in the name of the girl with Rs 250. You can get tax exemption on investing a maximum of Rs 1.5 lakh in a financial year. Currently, this scheme is getting interest at the rate of 8.50%.
4. Investing through SIP
By investing in mutual funds through SIP, you can easily accumulate a large amount for your child's education. You can get great returns in the long term by choosing mid cap or small cap.
How to choose the best plan
- Type of Insurance: When choosing the best plan for a child, parents should first determine whether they prefer an insurance plan, an education plan, or a combination of both. These options provide financial security to the child, especially in the event of the parents' death.
- Total Coverage Amount: This depends on the type of course the child plans to pursue. It’s important to consider factors such as the child’s tuition fees, inflation, and living expenses.
- Premium to be Paid: This is a crucial aspect of the plan, as it depends on the income of the parents. It’s advisable to choose a plan that fits your budget and does not require spending beyond your means.
