World Children’s Day will be celebrated on 20 November. As a parent, this significant day might prompt you to think about how you can make your child’s future secure. Your ambitious children need a financially secure future so that they can do great in their higher education and career. With several schemes and investment options, you can secure your kid’s finances easily. Some of the best plans in which you can invest for your child’s future are Sukanya Samriddhi Yojana (SSY), equity mutual funds (MF), and Public Provident Fund (PPF). It should be noted that the SSY scheme is only available for daughters, while the other ones are for both sons and daughters.
Let’s have a look at these schemes in detail:
Sukanya Samriddhi Yojana
SSY is a debt instrument which offers an interest rate of 7.6 per cent. One can open an SSY account for a girl child of up to the age of 10 years. The plan has a tenure of 21 years, or it closes after her wedding. You can make deposits till the 15th year. You will be provided returns from the 16th to the 21st year by the SSY corpus. No additional contributions can be made then.
The whole SSY corpus remains locked until your daughter reaches the age of 18. After this, you can withdraw only up to 50 per cent of the amount for educational requirements. Therefore, there may be a problem with liquidity.
Public Provident Fund
If the issue of liquidity is concerning you, then having a PPF account can be beneficial as well because you are able to withdraw funds from the PPF account after a period of 15 years. It also offers more flexibility and can be utilised for investing after the closure of an SSY account. PPF offers 7.1 per cent interest.
Equity mutual funds
If your plan is not long-term, then MFs are a better option. MFs provide you flexibility and you can take out the sum when the need arises. Furthermore, it can also generate inflation-beating returns in the longer run.
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