Someone once said education is the best gift you can give to your child. It is what enables them to make a future for themselves. But in order to ensure a good quality education for your child, you need to start thinking of saving options from the beginning, since good education comes at a cost.
Investing in a child plan needs a lot of pre-planning. The entire process at times seems very daunting. But you needn’t worry anymore. Here are a few things you should take into consideration while investing in a child saving plan.
Understand your child’s goals
If you have been investing in a child plan since your child was a toddler, this tip will come in handy once your child turns 12 or 13. Once children get to that age, it gives the parents a rough idea about their aptitude and aspirations.
Your saving should depend on the kind of educational course your child wants to pursue. Most insurance providers allow you to alter a child saving plan once you have invested in it.
Take inflation into account
Unfortunately, education isn’t as affordable as it used to be 10 or 15 years ago. Similarly, when you invest in a child plan today, do so by understanding that the cost of education is going to be higher when your child grows up. So, calculate the amount accordingly before you begin to invest.
Choose the right investment channel
There are multiple ways in which you can invest to ensure a promising future for your child. There are mutual funds that can be started at a minimum amount. They offer you maximum returns with minimum risk. Then there are ULIPs. These plans pay a lump sum amount at the end of maturity.
Term insurance policy is a great way to ensure that your child’s dreams will not be hindered in your absence. PPF or public provident fund is a 15-year scheme that allows you to save for your child’s future without worrying about taxes.
These are the basics you need to know about investing in a child saving plan. Start saving today and watch your child thrive in the future.