Becoming a parent is a joyous and wholesome experience that is truly unmatchable. However, it also comes with many responsibilities, including caring for your child’s health, education, and marriage expenses, as well as other future expenses. As a young couple, all of this can appear daunting, but the approach is to take one step at a time. Let’s start with saving plan options that can help ease the expenses of funding your child’s education right from primary school till higher education.
Worried About Your Child’s Education? Explore these Saving Plan Options
Planning your child’s education in today’s time can be worrying, especially when education expenses are skyrocketing all around the country. While you cannot control the rising expenses of education, you can surely keep yourself prepared to meet these expenses easily. Take a look at the savings plan options:
- Mutual Funds
Investing in mutual funds is a reliable option, especially if you are looking for long-term goals like your child’s higher education. Additionally, you can opt for the children’s scheme offered under mutual funds that are specifically designed for expenses like a child’s education or marriage.
Remember that these plans come with a lock-in period of five years, or the lock-in period ends when the child becomes an adult.
Pro Tip: You can start an SIP to ensure regular investments in the scheme and also enjoy the flexibility of increasing the investment as you go forward.
Did You Know that Child schemes under mutual funds have delivered an average of 29% returns in the financial year 2023-2024?
- Life Insurance Plans
Purchasing a life insurance plan is another reliable option to ensure that your child’s education is not hindered even when you are not around. In today’s time, there are multiple life insurance plans that you can explore depending on your needs. For instance:
- To combine life insurance with market-linked returns, you can purchase a unit-linked insurance plan.
- To enjoy the benefits of life cover and a steady income, you can explore money-back plans.
- Equity Linked Savings Scheme
A linked savings scheme is also a type of mutual fund that is focused primarily on investing your money in equities. ELSS is typically known for wealth creation in the long run, which is exactly what you need to fund your child’s higher education. Additionally, due to its exposure to a diverse portfolio, investment in ELSS is equivalent to lowering the risk of investment concentration.
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Remember that the lock-in period of ELSS is three years.
Did You Know that as an NRI, you can invest in ELSS through your NRE or NRO account? You can explore more NRI investment options to plan your child’s future.
- Fixed Deposits
If you are wary about investing or purchasing a plan that comes with a certain level of risk, you can always rely on fixed deposits. Fixed deposits are typically known for offering safe and guaranteed returns that can easily take care of expenses like education and marriage. The best part? You can keep investing a fixed sum of money regularly to build a sizable corpus over the years.
Is a Saving Plan Option Worth the Investment?
Worrying about your child’s education or future financial needs is common. But as smart parents, you must start saving early to easily meet your child’s education and other expenses. Now, instead of going the traditional ways of savings, you can choose to invest in a savings plan. Here’s why:
- Combining Savings and Investment
Choosing a child savings plan is a step you take to combine the benefits of savings and investment. With options like ULIP, mutual funds and ELSS, you can easily accumulate enough wealth to fund your child’s education while also enjoying steady growth through market-linked returns.
- Building a Diverse Portfolio
Saving plans offer you an opportunity to build a diverse investment portfolio that allows you to stay afloat even during times of financial crisis. Instead of going for investment concentration by choosing one asset, you can diversify your money through mutual funds or ELSS for better returns.
- Peace of Mind
Knowing that your child’s future financial needs are managed, you can enjoy peace of mind and stop worrying about funding your child’s education, marriage and other expenses.
Summing Up
As parents, seeing your child live a comfortable life and study in an institution of their choice without worrying about finances is possibly one of the most settling feelings. Even when education expenses keep skyrocketing, you can secure your child’s financial needs through savings plans. You are in luck as a young couple because in today’s time, savings doesn’t necessarily have to be done in traditional ways.
You have access to impressive savings plans that offer guaranteed returns and benefits of investment as well. Make sure to choose a plan that aligns with the needs of your child and your financial stability.
