Best Savings Schemes for Children In India

Investing when your child is young will help you create a corpus of funds by the time he/she reaches adulthood. This will help your children study in a university of their choice, or simply serve as a financial cushion as they enter the workforce. But, before you put all your eggs in one basket, take a moment to understand the various savings schemes that you can make use of. Recurring deposits: Recurring deposits are similar to fixed deposits. The key difference is that you invest small sums of money on a monthly basis rather than investing a lump sum at one go. This is ideal for you if you are salaried and can afford to save on a monthly basis. The interest in this scheme is paid at the lapse of the tenor. Public Provident Fund: This a long-term investment option, with a tenor of 15 years that is backed by the Government of India. Public Provident Fund offers a rate of return of 7.6% and allows you to invest a maximum sum of Rs.1.5 lakh in a single financial year. Besides, the principal amount and interest amount are tax-free as per Sections 80C and 10. Sukanya Samriddhi Account: If you have a girl child, this investment option is ideal for you, offering a rate of interest of 8.1%. This is a government scheme designed exclusively for the girl child and you can invest in it until she turns 10 years old, by investing a maximum of Rs.1.5 lakh per year. You can withdraw from this account when your daughter turns 18, and the account itself is valid for 21 years. Fixed deposits: This is a safe and stable investment option that is ideal for your child. This option enables you to choose between periodic payouts and cumulative interest payout, available to you at the end of the tenor. To create a corpus for your child, it is best that you select a cumulative rate of interest. Besides, FDs offer superior stability and assured returns. You can also withdraw funds early, if need be, by paying a penalty. Save funds for your child’s future by investing in high-yielding Fixed Deposits for Child from Bajaj Finance. This fixed deposit allows you to gain from an attractive rate of interest of 7.85%, flexible tenor of your choice and online FD management. Mutual funds: This is a market-driven security that allows you to invest funds for your child in stocks or debt instruments. Mutual funds are beneficial because they provide you a high rate of returns. So, if you’re looking at making a long-term investment, they make for are an excellent option. But, remember that since they are linked to market forces, they are riskier than certain other investments. Whether you are investing for yourself or your children, you must focus on creating a diverse portfolio. So, invest in a combination of these investment options to create wealth for your children. Also Check: Fixed Deposit for Senior Citizen