Saving Plans and Schemes to Give Children a Debt-free College Education

2021-09-06

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Planning for your child's education is one of the key components of financial planning. Every mother acts selflessly to give the best to her child under her capacity. Good education is one such thing. When you plan for your child's education corpus, you cannot afford to miss inflation in your calculation. Inflation for education is highest in the country.

If your child is a toddler, you may not know what your child will study - complex chemistry molecules or economic theories. As a mother, it may be difficult for you to determine the amount you may need. However, you have to assume some course for your child and plan accordingly. The earlier you start, the easier it is. If you start early, you can create an educational corpus for your child, even with a small investment. When you give time to your investment, compounding works like magic on your investment.

Five Investments for the your Child’s Higher Education

When you plan for your child's education, you need to look for saving plans that have a maturity date in line with the year you will need the funds. Below are the five best savings plans you can explore for your child's education.

1. Moneyback Plan

Planning for a child's education is not only about the cost of college fees. The education cost starts well before that. You will have to invest in his coaching classes at different stages and then for the graduation fee.

With a Moneyback plan, you get payouts at regular intervals and a lumpsum amount at maturity. In case of an unfortunate event, you get a sum assured that acts as a plan B for you. This way, the Moneyback Advantage plan secures the future of your child from all sides.

When you buy the plan, you have to pay a premium for ten years. You receive the payouts at the end of the 5th, 9th, and 13th years. You can use these payouts to meet different expenses related to the education of your child. At maturity, you will receive the sum assured that you can use to pay college fees.

The premium amount will depend on your age and the sum assured you want. You also get tax benefits on the premium you pay for this plan.

4. Public Provident Fund (PPF)

Public Provident Fund is another investment option you can explore as a mother for your child's education. The PPF comes with a minimum tenure of 15 years. If it is in line with the requirement, you can opt for this saving plan. The rate of interest varies under this plan. At present (July 2021), the rate of interest is 7.1%.

You have the facility of partial withdrawal in the 7th year, in case you need funds before the tenure completion. You can start investing in a PPF account with as little as Rs 500.

5. Sukanya Samriddhi Yojana

This saving plan is specifically for a girl child. You can deposit a minimum of Rs 1000 and a maximum of Rs 1.5 lakh per year in this savings plan. The policy duration is 21 years. You will have to deposit money only for the first 15 years. You get higher interest under this compared to other similar saving plans. The amount invested is eligible for tax deductions. Although policy tenure is for 21 years, you can withdraw partial funds, up to 50%, once your girl child turns 18 years of age.

Learn more about Sukanya Samriddhi Yojana.

Some life goals cannot be compromised or delayed. Your child's education is one such goal. Therefore, you should always have a separate plan for your child's education and not mix it with other investments. Best saving plans for children ensure they get the best future in all life situations.

Disclaimer - This article is issued in the general public interest and meant for general information purposes only. The views expressed in this blog are solely those of the writer and do not necessarily reflect the official policy or position of Canara HSBC Life Insurance Company Limited or any affiliated entity. We make no representations or warranties of any kind, express or implied, about the completeness, accuracy, reliability, suitability, or availability with respect to the blog or the information, products, services, or related graphics contained in the blog for any purpose. Any reliance you place on such information is therefore strictly at your own risk. You should consult with a qualified professional regarding your specific circumstances before taking any action based on the content provided herein.

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