Objective of choosing best child investment plan in India:
In this fast growing economy, we need to be extra cautious about our child’s future by investing in best child investment plan. The expenses incurred in studies earlier are much more cheaper than today. Therefore, we have to plan at the earliest so that at the proper time, fund can be arranged for our child’s studies. Therefore, there is need to focus on best child investment plans which are available in India.
Even one can plan in such a way that he/she can save money for their children for higher studies or for their marriage by opting for best child investment plan.
Now the next question in our mind is how to save and where to invest. We know that there are lots of child investment plans in India but as far as safe and secure investment is concerned, there are 2 best child investment plans in India i.e. PPF (Public Provident Fund) and Sukanya Samriddhi Account.
- This is the best scheme to invest. It is a 15-year scheme where you can build a corpus for your child’s education.
- The current interest rate of 8 per cent is much more than the interest rates of banks, which are at 7.5 per cent.
- The interest earned is tax free in the hands of investors. Apart from this you get a tax rebate of upto Rs 1.5 lakhs under Sec 80C of the Income Tax Act. One can start saving with a minimum of Rs.500 to Rs 1.5 lakhs in a year. One can deposit amount in lump sum or in a maximum of 12 installments per year.
- Loans and withdrawals are permitted depending upon the age of the account and balances as on the specified dates.
Sukanya Samriddhi Yojna
- Sukanya Samriddhi Yojana is a small saving scheme, which can be opened in post offices and designated private and public banks in the form of a savings account in the name of the baby girl. The interest rate is declared quarterly just like other post office schemes. The interest rate for Jan-Mar’19 (Q4, FY 2018-19) was 8.5%.
- This scheme is only for those who have a girl child.
- This scheme has a drawback that is there could be revision in interest rates from time to time.
- There is also a tax benefit offered under Sec 80C of the income tax act.
- Only parents or legal guardians of the girl child can open a Sukanya Samriddhi account in the name of the girl.
- The girl child should be less than 10 years at the time of account opening. The account can be operational till the girl reaches the age of 21 years.
- The initial investment can start from Rs. 250 and a maximum of Rs. 1,50,000 annually with further deposits in the multiples of Rs. 100.
- Only two Sukanya Samriddhi Yojana accounts are allowed per family i.e., one for each girl child.