What is the Most Effective Investment?

4 Effective Investment Options
Conclusion

For your child to be able to live independently and financially rely on themselves for anything they need in their future, a parent or a guardian must invest in efficient investment options. This will help them reach and fulfill their goals and help them to get their higher education abroad easily. To fulfill all of their short and long-term goals, it is advised to choose effective investment options and invest in them.

It is important to start early and save more for their needs to be fulfilled. You must choose the right option to invest in for your child to have a financially secure future even at times of crisis. Several investment options can provide the necessary options and benefits. There are many options to choose from. You must compare, consider all the aspects that must be considered, and start investing in your child’s future as soon as possible to yield good returns out of them.

4 Effective Investment Options

Several investment options can yield good returns. Some of these are -

Public Provident Fund (PPF)

A parent can open an account for their child even if they own one for themselves. The maximum combined amount that can be put into these accounts is Rs 1.5 lakh. It is advised to open an account for your child even though you have one for yourself. It plays a major role in financially securing the child’s future. It is better to save and grow by contributing to both of them simultaneously than to contribute just to one. The maximum deduction under section 80C of the Income Tax Act, 1961 is Rs 1.5 lakh per annum. The investments of both accounts are allowed to have tax deductions and can avail of tax benefits.

Gold ETFs

One other efficient way to save and grow your money is by investing in gold ETFs. In this, you will have to buy gold. Buying gold does not have to be physical. You can invest in virtual gold also. This is the best option if you are not a fan of taking risks as there is no need to worry about theft. There is also another advantage in investing in gold. You do not have to pay for a locker or a storage unit as virtually, there are only bonds. This can act as a liquid asset for the child to convert to money whenever required. You can consistently buy small amounts of gold and pool all of it together to have a large amount of gold in the end. Buying Sovereign gold bonds issued by the government regularly is also a great investment. They have a maturity period of 8 years and a lock-in period of 5 years.

Child Plans with Waiver Premium

There are some life insurance plans that are efficiently built to fulfill every need of a child to secure their future financially. A waiver premium or rider benefits are made as parts of these plans. The waiver makes sure that the plan stays intact even if the parent or the guardian of the child passes away. The sum assured is paid by the insurers after their demise.

Mutual Funds

To be able to get good returns, a parent must invest in equity mutual funds for their child before they get any closer than 7 years apart from the child being an adult. A portfolio has to be built consistently stating the investments and schemes you invest in.

Conclusion

It is important to provide a secure future for your child. To be able to do so, you must choose a suitable plan for your child to invest in. You must aim for good yields. This can be done by investing in options that provide more exposure towards equity.