Finance

5 Long-Term Investment Options for Children

Bringing a child into the world or adopting a child into your family can be an overwhelming yet exciting experience. However, it is an even bigger responsibility to take it upon your shoulders. One of the biggest responsibilities while raising a child is ensuring its financial stability and making italong with making them a capable citizen. 

Lack of awareness or finances prevents most parents from investing forin their children. However, since you have reached this page, you seek education on the topic and we are happy to help. However, with proper planning and knowledge about the investment opportunities, you as a parent, can secure a better financial future for your child.

You can make these investments yourself if you have adequate knowledge of the topic, but it is a good idea to consult a stock market advisory for expert guidance.

Let us discuss our top 5 picks for long-term investment plans for your child.

5 Long-Term Investment Plans For Your Child

  • Sukanya Samriddhi Yojana

Sukanya Samriddhi Yojana (SSY) is a small deposit scheme plan provided by the government of India for your girl child. Under this scheme, you musthave to open your daughter’s account at ain the nearby post office or bank. 

You must deposit at least ₹250 or at most ₹1,50,000 every yearmake a deposit every year of at least ₹250 or at most ₹1,50,000. The deposit plan will mature after 21 years; you, and you musthave to make the deposits for at least 15 years. 

This deposit scheme offers you returns in the form of interest (the interest rate is 8.0% from 1st April 2023 to 3rd June 2023).

  • <h3> Public Provident Fund </h3>

Public Provident Funds (PPFs) are easily available for children, salaried employees, along with salaried employees or entrepreneurs. 

As a parent, you can open a separate account for your minor children for investment purposes. That dependent account will allow you to deposit any amount into a PPF account up to ₹1,50,000/year. 

This can be utilized for numerous purposes in the future like education, medication, or financial stability.

  • Fixed Deposit

A Fixed Deposit (FD) is an excellent way to save up and compound for your child’s future. As an investor, you can choose the number of years you want to keep your money in the FD. 

Since the FD account has a lock-in period, you cannot withdraw it for any purpose. This safeguards your children’s futurethe future of your children by locking in the money and providing interest against it. 

This interest rate differs from bank to bank; however, it can be maximized by choosing the best option available.

  • Child Plan (Insurance)

Numerous insurance policies are  There are numerous insurance policies dedicated to children and the welfare of their financial future. When you buy a policy for your child’s future, you mustwill have to pay periodic premiums to the insurance company: yearly, quarterly, or monthly. 

In return, the company will offer various benefits, such as  like cashless claims for educational or medical purposes, tax benefits, financial compensation in case of parents’ death, etc.

  • Mutual Funds

Mutual funds seem like a far-fetched investment for children; however, you can might seem a far-fetched investment for children; however, you can definitely optimize it according to your future needs and align them accordingly. Mutual funds will diversify the investment portfolio and ensure safer returns on the investment. 

Since it is a long-term investment, you can plan to invest for more than 5 years. You can always consult a professional stock market advisory firm in India for your child’s portfolio management.

Final Thoughts

Understanding investments and the market is necessary for making the right choices at the right time. The best way to do this is to seek professional help for your child’s portfolio management and to diversify it efficiently.

If done right, a long-term investment will benefit your child’s future. While the abovementioned types of investments are trustworthy, you mustwill have to align the investment choices with your future financial goals. 

Go through the terms and conditions of all the investment options and decidemake the decision for yourself.

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