How to create a secure and stable future for your child

When the children grow up their needs also increases and so does the need for financial backup for them. Thus, a common question that parents often struggle to find the answer to is, how to make sure to provide them the best possible future? Preferably, an individual should start saving for their child right from the time they are born or even earlier. However, it is never too late to start working towards creating a financially secure future for your child.

Investing in your child's future:A wise decision & a loving choice

Benefits of Investing In Child Plan

Waiver of Premium Benefit

Future Premiums are paid by the insurer upon death of policyholder

Flexible Payout Options

Your premiums help your child achieve their dreams through lump sum or regular payouts

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Get rewarded with Wealth Booster and Loyalty Bonus for staying invested with us

Zero Commission

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Tax Benefits^

You get tax benefits under Section 80(C) and no tax on returns under Section 10 (10D)

Investment Flexibility

It offers the flexibility to invest at regular intervals or as a one-time contribution

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Nothing Is More Important Than Securing Your Child's Future

Invest ₹10k/month your child will get ₹1 Cr^# Tax-Free* on Maturity

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We are rated^~

7.7 Crore

Registered Consumer

Insurance Partners

4.2 Crore

Policies Sold

Disclaimer: #The investment risk in the portfolio is borne by the policyholder. Life insurance is available in this product. The maturity amount of Rs 1 Cr. is for a 30 year old healthy individual investing Rs 10,000/- per month for 30 years, with assumed rates of returns @ 8% p.a. that is not guaranteed and is not the upper or lower limits as the value of your policy depends on a number of factors including future investment performance. In Unit Linked Insurance Plans, the investment risk in the investment portfolio is borne by the policyholder and the returns are not guaranteed. Maturity Value: ₹1,05,02,174 @ CAGR 8%; ₹50,45,591 @ CAGR 4%. *Tax benefits and savings are subject to changes in tax laws. All plans listed here are of insurance companies’ funds.

You can consider investing in some of the best child investment plan to create a strong financial cushion for your child’s secured future. Further here we have discussed in detail different ways you can do this.

Cash

Even though gifting cash to the children is always welcome, it would make sense if you offer a monetary gift to the child for a specific purpose. It can be used to fulfill different financial liabilities like a down payment for loan or repayment of student loan or monthly installment for rent, etc. Any gift in form of cash can be very helpful for parents to fulfill the immediate requirement of the child or any short-term financial requirement.

Child Savings Account

As one of the best child investment plan, the savings account for the child works similarly like regular bank saving accounts. The child savings account can not only help an individual to teach their kids the importance of financial management but can simultaneously keep saving for their future. Savings account for a child that can be opened for children below the age of 18 years. The account can be operated by the child once they reach 10 years of age. However, the parents can set limits on the withdrawal amount. Child savings account currently offers interest up to 6% p.a

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Invest ₹10K/Month YOU GET ₹1 Crores^* For Your Child View Plans

Invest ₹8K/Month YOU GET ₹80 Lakhs^* For Your Child View Plans

Invest ₹5K/Month YOU GET ₹50 Lakhs^* For Your Child View Plans

Standard T&C Apply *

Child Insurance Plan

A child insurance plan can provide your children with the right financial back up by providing them financial protection in case of any eventuality. Moreover, in the child insurance plan in case of the unfortunate demise of the insured person, all the future premiums of the policy are waived off and the benefit of the policy remains to be intact through the completion of the policy tenure. Thus, if you want to secure the future to your child then make sure that you purchase a child insurance plan.

Sukanya Samriddhi Yojana

This is another best child investment plan, which is specifically designed to provide financial protection to the girl child. This plan was introduced by the government of India under the ‘Beti Bachao Beti Padhao’ campaign to secure the financial future of the girl child. Thus, if you have a girl child make sure that you invest in this investment option. The parent can open a Sukanya Samriddhi Yojana account in the name of the girl child. An individual can open the account anywhere in India before the girl child turns 10 years old. The minimum deposit amount can be as low as Rs.1000 whereas one can make a maximum deposition up to Rs.1.5 lakh in a financial year. Currently, the scheme offers the highest interest rate of 8.3% as compared to the other government scheme.

Unique Triple Benefit

Future premiums paid by insurer on parent's death

Monthly income to fund child's education on parent's death

Lumpsum payout to family on parent's death

Returns

Return as of Apr 2024
12%-15%
8.2%
7.1%

Availability

Availability
Girl Child or Boy Child
Girl child only
Girl Child or Boy Child

Max Entry Age
Upto 18 years
Upto 10 years
No Age Limit

Flexibility

Invested Amount can be Withdrawn after
5 years
21 years
15 years

Conditions for Premature closure
Anytime after 5years
Extreme Compassionate Grounds
Serious Ailments or for education

Penalty on Premature Closure
No Penalty after 5 years
Returns reduced to Post Office Savings rate
1% reduction in interest rate

Max deposit amount in an year
No Limit
1.5 Lacs
1.5 Lacs

Documentation

Documentation Required for Withdrawal
Low
High
Low

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Systematic Investment Planning (SIP)

To fulfill objectives like savings funds for your child education, marriage, etc. investment in equity mutual funds through SIP can be considered as a perfect choice of investment for the long-term. As a parent, you can start investing in SIP for a tenure of 10-15 years, with a minimum amount of investment of Rs.500.

For example, if you make a contribution of Rs.6,000 per month for 18 years of tenure ( duration is taken as from the time of the birth of the child to from the time he/she goes for higher education) in an equity mutual fund, then, assuming the rate of interest as 12% pr annual you can gain a capital growth of Rs.45.9 lakh. Assuming the rate of inflation of 6% the value of this accumulated sum will be Rs.23.4 lakhs.

With the advantage of the power of compounding, the investment returns offered by the equity mutual funds are more effective to beat the rate of inflation of 5-6% every year. Thus, it makes the SIP investment one of the best child investment plans in the long-term.

Wrapping it Up

Children often cherish gifts given by their parents. even though they might not seem entirely happy with some of these gifts initially they will release the actual value of the gift in the long-term and will thank you for it. So, make sure that you take advantage of these investment opportunities available to you and secure the financial future of your child.

†Policybazaar does not endorse, rate or recommend any particular insurer or insurance product offered by any insurer. This list of plans listed here comprise of insurance products offered by all the insurance partners of Policybazaar. The sorting is based on past 10 years’ fund performance (Fund Data Source: Value Research). For a complete list of insurers in India refer to the Insurance Regulatory and Development Authority of India website, www.irdai.gov.in
*All savings are provided by the insurer as per the IRDAI approved insurance plan.
^The tax benefits under Section 80C allow a deduction of up to ₹1.5 lakhs from the taxable income per year and 10(10D) tax benefits are for investments made up to ₹2.5 Lakhs/ year for policies bought after 1 Feb 2021. Tax benefits and savings are subject to changes in tax laws.
#The investment risk in the portfolio is borne by the policyholder. Life insurance is available in this product. The maturity amount of Rs 1 Cr. is for a 30 year old healthy individual investing Rs 10,000/- per month for 30 years, with assumed rates of returns @ 8% p.a. that is not guaranteed and is not the upper or lower limits as the value of your policy depends on a number of factors including future investment performance. In Unit Linked Insurance Plans, the investment risk in the investment portfolio is borne by the policyholder and the returns are not guaranteed. Maturity Value: ₹1,05,02,174 @ CARG 8%; ₹50,45,591 @ CAGR 4%
+Returns Since Inception of LIC Growth Fund
¶Long-term capital gains (LTCG) tax (12.5%) is exempted on annual premiums up to 2.5 lacs.
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^^The information relating to mutual funds presented in this article is for educational purpose only and is not meant for sale. Investment is subject to market risks and the risk is borne by the investor. Please consult your financial advisor before planning your investments.