Safe Investment Options for a Child

As a parent, it is your responsibility to ensure your child’s future is financially secure. This can be done in many ways. There are several investment instruments that you can choose to invest in for your child. Different investment options provide different benefits for saving your money for your child’s future. This helps your child to develop self-dependency and will not have to depend on anybody else financially even after the sudden death of the parent or the guardian. 

You can invest in many effective plans and policies that are specifically built to support your child financially and promote financial independence. Investing in these kinds of plans has many benefits. You must choose a trusted and safe plan in order to provide all-around protection to your child financially. 

3 Safe Ways To Invest in a Child

3 safe ways to invest in a child are listed below -

1. Child Plans

A great way to start planning for the future of your child and save for foreseen or unforeseen expenditures in their future is to invest in child plans. Child plans are the plans that provide investment and insurance. Child plans come with benefits like tax benefits and provide the sum assured if the parent or the guardian suddenly passes away. In the case of the sudden death of the parent or the guardian, the insurer pays the premiums on behalf of the child. This way, the child does not have to depend on anybody after the demise of the parent or the guardian.

2. Gold ETFs

Another great way to save and grow money for your child is to buy gold in small amounts consistently over a few months and pool all of the accumulated gold after a long period. This can act as a liquid asset. This means that the child can convert the gold into money whenever required. Buying gold can be virtual also. You can buy bonds that are issued by the government regularly. Since these are bought virtually, theft risk is nothing to be afraid of. However, while selling the gold, you will have to pay the applicable taxes.

3. Public Provident Funds (PPFs)

Even if the parent owns an account for themselves, it is better to open an account only for their child. The benefit is that the investments you make in both these accounts are eligible for tax benefit under section 80C of the Income Tax Act, 1961. It is advisable to simultaneously contribute to both the accounts instead of just one account to save and grow money efficiently. The maximum amount that can be deposited to both the accounts combined at once is Rs 1.5 lakh. The maximum tax deduction in these accounts is Rs 1.5 lakh under tax benefits.

Conclusion

To provide a financially secure future for your child, you can invest in some investment options which are safe and effective. Some such options are child plans, PPFs, Equity Mutual funds, and gold ETFs. Before investing in plans to save and grow your money for your child, you must consider your financial stability and make sure you pay the premiums required in order to safely complete the terms and conditions of the policy to avail of all the benefits.

Also read - How to Choose the Best Child Insurance Plan?

Is Waiver Of Premium Rider Necessary While Purchasind A Child Life Insurance?

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.