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Best Investment Plan for Your Child 2024

Best Investment Plans for child can help every parent to secure their child’s financial future. As a parent, some crucial milestones you must plan for include your child’s education, marriage, and other aspirations, such as starting their own business. ...Read More

Explore the range of investment plans from HDFC Life that suit your needs:

With investment plans from HDFC Life you can opt for market linked returns or guaranteed1 returns as per your financial goals -

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Investment Plans

What Are Some of the Best Investment Plans for Your Child?

Today’s market offers multiple strategic investment options to plan for your child’s future. Let’s explore few of the best investment plans for your child that can help you build a corpus and empower your child to fulfil their future financial goals.

10 Best Investment Plans for your Child

Below listed are some investment options from which you can select the most suitable one for child as per their financial goals -
1

Unit-Linked Insurance Plans (ULIPs)

ULIPs are unique financial tools that combine the benefits of life insurance coverage with investment. They offer the dual advantage of market-linked returns along with life cover. As an investor, you can control how your funds get allocated across various asset classes. So, you can invest based on your risk appetite while enjoying market-linked returns. ULIPs are a popular choice for that seeking long-term wealth creation, making them a valuable consideration for securing your child’s financial future.

2

Life Insurance

Along with providing financial protection in difficult situations, life insurance plans can function as a potent investment tool. Policies such as endowment plans offer financial security in case of unforeseen events while ensuring disciplined savings over the policy term. You can customise these plans to meet specific financial goals, including financing your child’s higher education abroad or saving for their marriage.

3

Systematic Investment Plans (SIPs)

SIPs are a systematic and disciplined way to invest in mutual funds. They are particularly suitable for those who may not have a lump sum amount to invest upfront. SIPs allow you to invest a fixed amount at regular intervals, ensuring the benefit of rupee-cost averaging and potentially high returns over the long term.

4

Fixed or Recurring Deposits

Traditional yet reliable, fixed and recurring deposits are low-risk options for child investment. They offer a fixed interest rate, ensuring stability in returns. While the returns may not be as high as some market-linked instruments, the safety and predictability make them a preferred choice for risk-averse investors.

5

Sukanya Samriddhi Yojana

Specifically designed for the girl child, the Sukanya Samriddhi Yojana is a government-backed savings scheme. There are tax benefits with Sukanya Samriddhi Yojana. This long-term investment ensures financial security for a girl child’s education and marriage.

6

Gold

Gold has been a timeless investment avenue in India. Many relatives gift newborns gold coins, jewellery and bullion as an investment. Gold is a tangible asset that allows quick liquidation during emergencies. Although the price fluctuates, it is not linked to market ups and downs, making it a reliable investment when the market performs poorly. Gold offers stability during economic certainties, making it a valuable addition to a diversified portfolio.

7

Public Provident Fund (PPF)

PPF is a long-term, government-backed savings scheme that provides attractive tax benefits. With a lock-in period of 15 years, PPF encourages disciplined savings and can be an effective tool for building a substantial corpus for your child’s future needs.

8

Bonds

Bonds invest in fixed-income instruments like government securities and bonds. While they offer lower risk than equity-based investments, they still provide better returns than traditional fixed deposits. Debt funds work best for conservative investors looking to balance risk and return.

9

Real Estate

Investing in real estate can be a long-term strategy for building wealth. While it may not be as liquid as other investments, property values tend to appreciate over time, offering a potential source of funds for your child’s future endeavours.

10

Mutual Funds

Mutual fund dealers allow you to compare the funds based on different metrics, such as level of risk, return, and price. Also, as the information is easily accessible, the investor will be able to make wise decisions. Besides, Mutual Funds offer benefits in liquidity and professional management.

 Why Is It Important to Invest for Your Child’s Future?

 

Investing for your child’s future is more than a financial decision. It’s an emotional and responsible commitment. Here’s why it’s crucial:

  • Rising Education Costs

    Education is the cornerstone of a successful future. As education costs rise consistently, early investment allows you to provide your child with the best possible educational opportunities without compromising quality due to financial constraints.
  • Financial Security

    Life is unpredictable, so you must ensure financial security for your child in case of any unforeseen circumstances. Investment options with an insurance component act as a safety net, guaranteeing financial support during difficult times.
  • Inflation Hedge

    Inflation erodes the purchasing power of money over time. By investing, you combat the impact of inflation, ensuring that the funds you set aside today will be sufficient to meet your child’s future financial needs.
  • Goal-Specific Planning

    Investing allows you to set and achieve specific financial goals for your child. Strategic planning ensures you have the funds to fulfil their educational, marriage and other life dreams.
  • Compounding Benefits

    The earlier you start investing, the longer your money has to grow. Most investments use the power of compounding to amplify your returns and provide exponential growth. Compounding re-invests your returns to create substantial wealth in the long run.
The importance of investing for a Child's Future. The importance of investing for a Child's Future.


What Is It the Right Time to Start Saving for Your Child?

The best time to start saving and investing for your child is now. Time is a critical factor in wealth creation, and the earlier you begin, the more you benefit from the compounding effect. Ideally, start your child’s investment plan as soon as your child is born. It helps you lay the foundation for a robust and secure financial future.

As your child grows, you will encounter several milestones - your child’s first steps, first day of kindergarten, losing their first tooth, and more. Starting a saving and investment plan during these formative years helps you prepare for future educational costs and extracurricular expenses.

Your child’s teenage years can become difficult to manage. Your little one is developing their own personality and wants independence. However, they do not have the ability to be financially independent at this time. Starting an investment plan during their teen years leaves you limited time to build a corpus for their higher education. However, it’s never too late to start safeguarding your child’s financial future.

HDFC Life Child Investment Plans 2024

At HDFC Life, we understand the significance of securing your child’s future. We have meticulously crafted our Child Investment Plans to address the diverse financial needs of parents. With a range of options, from ULIPs to endowment plans, we offer flexibility, transparency, and the assurance of a financially secure future for your child.

Calculators to Plan Your Child’s Financial Future

To help you make informed decisions, we provide comprehensive calculators designed to assist you in planning your child’s financial future.

Child Education Planner

Child Education Planner

The Child Education Planner calculator helps you estimate the future cost of your child’s education based on their current age, the age when they will start the course, the current cost, the inflation rate, and more. It enables you to set realistic savings goals to ensure you prepare for your child’s educational expenses.

Human Life Calculator

Marriage Expense Calculator

The Marriage Expense Calculator aids in estimating the cost of your child’s wedding. It allows you to plan your investments and give your child the wedding they deserve.

Human Life Calculator

Investment Calculator

 The easy-to-use investment calculator empowers you to plan your investments, estimate returns, and navigate the world of financial security.

Frequently asked questions on Child Investment Plans

1 Which plan is best for your child’s future?

The best plan depends on your financial goals, risk tolerance, and investment horizon. ULIPs are ideal for those seeking market-linked returns with insurance coverage. Traditional life insurance and endowment plans provide a mix of protection and savings. You can consult a financial advisor to determine the most suitable plan for your child’s future.

2 How to invest for a 7-year-old?

Investing for a 7-year-old involves considering a combination of factors, including the investment horizon, risk appetite, and financial goals. Child-specific investment plans are popular choices. Tailor the investment strategy based on your child’s future needs and your risk tolerance.

3 What is HDFC Life’s plan for a girl child?

HDFC Life offers child plans that help you build a corpus for your child’s future needs. Our offerings provide financial security for both boys and girls. Parents looking for plans for girls can consider the Sukanya Samriddhi Yojana.

4 Can I open an SIP for kids?

 Yes, you can start an SIP for your child. Many financial companies offer SIP options specifically to help you meet your child’s future financial goals. These plans often have a lock-in period until the child reaches adulthood, helping in disciplined savings for their future.

5 How do I buy bonds for my child?

You can buy bonds for your child through various channels, including banks, financial institutions, or online platforms. Consider government savings bonds or fixed-rate bonds for stable returns. Consult with a financial advisor to understand the best options based on your child’s investment horizon.

6 How to invest for a newborn?

Investing for a newborn involves a long-term perspective. Consider starting with options like child insurance plans, SIPs, or fixed deposits. Remember, a longer investment horizon allows for a more aggressive and potentially rewarding investment strategy.

  1. For Single premium, the special addition is 1% of the Single premium at inception only.
  2. This is available in case of Premium Waiver option.
  3. Save 46,800 on taxes if the insurance premium amount is Rs.1.5 lakh per annum and you are a Regular Individual, Fall under 30% income tax slab having taxable income less than Rs. 50 lakh and Opt for Old tax regime.

ARN: MC/12/23/6640