What Small Investments Make Money?

Having a small amount of money to invest in should not stop you from investing in your child whatsoever. There are a few ways to effectively invest for the future and unforeseen circumstances in the future of your child. To financially be able to support them and help them get through times of crisis, you must invest in safe and suggested investment options.

Let us suppose you have a small amount you can spare at the end of the month. You can either donate it for a good cause or plan for your child’s financial security and independence. Some investment options provide plans to help you save and grow your money to help your child financially. Some such options include equity funds, Debt mutual funds, PPFs, Sukanya Samriddhi Yojana, etc.

3 Small Investment Options

There are a few investment options that help you save and grow your money for your child and their well-being even with small amounts of money. Some such options are -

1. Debt Mutual Funds

Debt funds are widely suggested funds to invest in to save and grow your money for the future of your child. They invest in instruments that generate fixed income like treasury bills, corporate bonds, commercial papers, government plans, and other market options. These instruments have a pre-decided maturity age. They also have pre-defined interest rates. The buyer can avail of these on the maturity of the plan. Generally, the returns do not come under the influence of market fluctuations. Hence, this way of investment is considered a low-risk investment.

2. Public Provident Funds(PPFs)

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.

3. Child Waiver Plans

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. These plans are used to save for the child’s higher education or their marriage expenditures. The money is also used for pre-planned major expenditures in the child’s future. 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.

Conclusion

There are many ways to invest for your child and the unforeseen expenditures they might come across in their future even if there is only a small amount of money available to invest in. Investment options like child plans with waiver premium, Public Provident Funds (PPFs), and debt mutual funds are great and widely suggested ways to save and grow if you have a small amount of money to spare. 

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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.