Being a parent, it is your liability to plan for better future of your child well in advance and make good savings and investments timely to guarantee better facilities to your child so that they grab the better opportunities in this competitive world. Every parent desires to offer best education to their children, however the increasing educational expenses and inflation has put a shadow of uncertainty on the future of the children. The money that you spend for child’s education is the major cash outflow of a household today. So, planning ahead to make good savings and invest in good Child Education Plan can help your child to have best and high quality education experience in future. So, to help you here are some options of savings and investments that can guarantee happiness and offer your child with possibilities to have sound education experience in future.
Life Insurance of Parents
Life insurance policies are the best way to secure the future of your child. Savings are the temporary method as it last for some period and may exhaust if any unfortunate situation arises. Life insurance of parents is considered to be the second roof for the children. There are insurances that enable the child to cover their educational expenses that would otherwise be hard to cover after unfortunate death of their parents. There are also insurance plans that provide a fixed amount to child after attaining certain age for their higher studies, thus taking care of their higher education costs in their parent’s absence.
You can also save taxes against all the investments and child’s education expenses under Section 80C and 80E. Under Section 80C of Income Tax Act, parents can save up to 1.5 Lakhs spent on the tuition fees of their children and under Section 80E parents can enjoy lower interest on education loans taken for higher education of their child. There are governments aided Child Plan like Sukanya Samriddhi that promotes and improves the education of girl child and this is a part of 80C family of dedications. The rate of interest is 9.1% in this plan and hence it gives lots of opportunities for the higher education of girl child.
Long Term Investments
Long term investments are always recommended. Fixed Deposits, Unit Linked Insurance Plans, SIP mutual funds and National Saving Certificates are the best long term investment tools. If you start investing in any long term Child Investment Plan from early childhood of your kid then it will help you to get sustainable amount of funds for better future of your child when they will grow up. But, if you have any targets to achieve in near future like enrolling your child in vocational streams of study, then regular recurring deposits can help you to get the required funds.
PPF is also the better long term investment tool that can help you to secure the future of your child. If you are looking for a long term investment, say for 15 years then PPF can do wonders for you as it offers you good sum of money on maturity which can be used to shape the career and future of your child. PPF also has the benefit of compounded interest, thus the saving can grow in leaps and bounds until it matures.
Well planned and strategic planning towards savings can help parents to overcome from the hurdle of education costs and make sound financial arrangements for betterment of their child’s future. If you investment timely and wisely in short and long term saving plans and spread the risk, then you can easily manage the huge education costs of your child in their adulthood.