For parents, children are the world. They are able to do anything to provide the best to them so when it involves their education, saving becomes the top priority. The fast rise in education costs is well known. As per Assocham, the price of education has increased over 150 % within the last a decade.
According to Ankit Choradia, research analyst, Karvy Stock Broking, this craze is likely to continue, which makes it even more important to consider your child’s future as ‘invest on priority’. Every mother or father desires his/her child to get the best possible education without any financial hurdle. For this, it becomes significant for parents to invest in the best options to meet their educational expenditures and secure their future.
If you are looking for some investment options for your child’s future then this article is for you. It is a Government of India effort to encourage saving for a female child. It can be opened from the right time of delivery to your little girl attain a decade of age group. The least Rs 1,000 and a maximum of Rs 1.Every year 5 cash can be spent.
Deposits can be produced for 14 years and the maturity amount of the accounts would be 21 years from the day of opening the account. The interest rate can be an attractive 9.2 per cent per annum, which is subject to change. Gold works as a hedge against equity and during volatile times. Gold ensures your risks in the financial marketplaces are hedged.
Anil Rego, chief executive officer and founder, Right Horizons, said, “Investments in platinum should be either through ETF, precious metal shared E or money Platinum. It is recommended to avoid physical investments in gold in order to reduce the risk of storage and the price associated with the physical holding. We believe the best way to do it is through Gold ETFs.
It will help you avoid the hassle of storing physical platinum but keeps providing you the understanding in the purchase price rise. It’s also advisable to take proper term protection plans for you to ultimately secure your son or daughter against any unforeseen event. Though these simple things do happen, however the probability or chances of happening of such events would be low or cannot be quantified. Rego said, “It really is advisable to have a risk cover in order to lessen or prevent the financial effect on the lives of your dependents in cased of happening of unforeseen events.
Thus one should make sure that the future costs related to your child’s necessity are adequately protected in this insurance. This ranks right up in conditions of priority there. A couple of two known reasons for this – longer time frame (10-15 years) and the mode of investment available (SIP). According to Choradia, a monthly SIP of Rs 5,000 in collateral mutual funds for 18 years can fetch you Rs 33 lakh, supposing a return of 12 % per annum.
Even considering the inflation of 6 per annum, this amount would more than suffice. However, the main element is not the total amount spent but the time given here. The power of compounding is definitely understated. Equity funds have a history of producing 12-15 per cent per annum returns. It is one of the favorite investment options of the lot of experts.
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The primary reason behind recommending this is the impeccable EEE feature. Moreover, the maturity or tenure period of this product i.e. 15 years is so very apt in conditions of investment for a child’s education or marriage. However, there can be an investment upper limit of Rs 1.5 lakh because of this account. Miscellaneous: One should also invest money in building your child’s skill sets.
It can be art, sports, digital anything, or mass media which reap good benefits for your child in the foreseeable future. Also teach your son or daughter the concepts of money and encourage him to save money for his own goals. This will help him realize the value of money. Get live Stock Prices from BSE and NSE and latest NAV, profile of Mutual Funds, calculate your taxes by TAX Calculator, know the market’s Top Gainers, Top Losers & Best Equity Funds. Like us on Facebook and follow us on Twitter.