5 WAYS YOU CAN PLAN FOR A FINANCIALLY SECURE FUTURE FOR YOUR CHILD
A financial plan for your child teaches your child how to save money and handle finances. It inculcates good saving habits among your child. It also helps to provide for a safe and secured future to your child. Most financial experts and advisors advise parents to build a constructive financial plan for their child and work towards it to ensure that their child’s future needs are met. So where can you invest money that will help you to provide a safe and secure future to your child? There are several investment options that can be chosen to help you meet your child’s future financial needs. Let’s understand these different types of investment:
- Mutual funds
Mutual funds are a popular choice among retail investors because of the professional management services it provides to its investors. There are different types of mutual funds available to cater to varying needs of investors. Depending on the regularity of your income or salary, your risk appetite, investment horizon, and financial goals, you can choose to invest in these investment options through SIP (systematic investment plan) or lumpsum.
You can also directly buy the shares of the companies that you see have huge potential to grow in the future. Though comparatively riskier than other types of investments, direct investments in stocks have the potential to generate significant returns, as high as up to 30 to 40% per annum. However, if you do not have the requisite skills and knowledge to invest in shares, you might consider sticking to mutual fund investments.
- Fixed deposits (FD)
One of the most traditional form of investments, FDs are quite popular among investors as they offer guaranteed returns that are pre-determined by the government before investing in these schemes. Returns on these investment options are revises on a quarterly basis. These investment options are immune to the volatility in the markets, thus making your investments quite safe.
- Life insurance
When you buy a life insurance policy for yourself, it acts like a security for your family which also include your children. A life insurance policy ensures that your family, including your children are provided for when you are not around to look after them. Your nominees are expected to receive monthly cash inflow to cover their expenses in case of your untimely demise.
- Child savings account
Apart from inculcating the habit of saving money and learning how to manage your finances among children, a child savings account also allows you to save for your child’s future. If you are a parent or a legal guardian, you can open a child savings account for your child provided that they are less than eighteen years of age.
Ensuring a safe and secure financial future for your child is probably the best gift you can give to your child. It will also help provide a good head start to your child when they begin their adult life. So, what are you waiting for? Invest today and secure your child’s future tomorrow. Happy investing!