How To Fund Your Girl Child's Higher Education?

Children’s gift mutual funds aim to raise funds for a variety of children;’s life events, such as higher education and marriage. These mutual funds are categorized as balanced or hybrid. Children’s mutual funds can only be purchased in the name of a child.

The average lock-in duration for children's gift mutual funds is 18 years. Depending on the equity exposure, these funds are characterized as hybrid-debt oriented or hybrid-equity oriented. If the equity exposure is 60% or more, they are classified as hybrid equity; otherwise, they are classified as hybrid debt.

Investment Options To To Fund Your Girl Child's Higher Education

You can consider the following investment options to fund your girl child's higher education -

1. Gold ETFs

A productive investment option you can choose to secure the future of your girl child is to buy gold. You can effectively buy through gold ETF(gold exchange-traded funds) regularly provided to you by the government. Gold ETFs represent bonds of gold. You can buy small amounts of gold consistently over a few months and pool the acquired gold over a long period. You can also buy Sovereign gold bonds (SGB). They are issued by the government. They come with a maturity period.

Must Read: How to Plan for Your Child Education Fund?

2. Sukanya Samriddhi Yojana

This plan was carefully built toward saving and growing money to provide for a girl child. It aims to ensure the security of a girl child. This plan can be purchased at any age of the girl child under 10 years. Under section 80C of the Income Tax Act, 1961, this plan also can avail of tax deductions.

3. Debt Funds

Debt funds are widely suggested as effective investment instruments. These are helpful to invest in to save and grow your money for the future of your child. They put your investment in other instruments that return fixed income like treasury bills. These have a predefined maturity age as well as predefined interest rates. The parent or the guardian can avail of these benefits when the maturity age of the plan is reached.

4. Public Provident Funds (PPFs)

You must open a PPF account for your child even if you have one for yourself to ensure their security. A maximum amount of Rs 1.5 lakh can be put into both of these accounts. Contributing to both of them together is sure to provide a better return. The maximum deduction under section 80C of the Income Tax Act, 1961 is Rs 1.5 lakh per year. The investments that you make in both accounts are eligible under tax benefits.

5. Child Plans

You can invest in a child plan. A child plan is an insurance cum investment instrument which helps you build an investment corpus for your child’s education. A child plan also helps you keep your loved ones shielded in times when you are not around them.

Conclusion

There is a wide range of options to choose from if you want to save and grow for your girl child. Some effective options that suit everybody have been discussed in the article. Investing in your girl child can help you save better for the unforeseen expenses that may occur in times of crisis.

Also Read: Why Consider Purchasing Child Life Insurance Plan?

Disclaimer: This article is issued in the general public interest and meant for general information purposes only. Readers are advised not to rely on the contents of the article as conclusive in nature and should research further or consult an expert in this regard.