When you hold your baby in your hands for the first time, it is a feeling like none other. Nothing comes close to that. As days turn into months and months into years, you rarely get over that moment when you were overwhelmed. You start planning for your child’s nursery, day care, schooling and explore ways to give the best upbringing possible. Needless to say, you want your child to get quality education and provide for the best support system. It is possible to do so with smart financial planning which is possible when you are moving on with best investment scheme. Here are 5 important saving plans that could help you with your child goals:
The best and hassle-free savings plan in India is a fixed deposit. Fixed deposits offer many benefits like high stability, a set interest rate and security. You can invest as low as Rs 25,000 and enjoy the flexibility of choosing the tenor of your choice. FD tenors start from a minimum of 7 days and usually go up to 10 years. With no lock-in periods, withdrawing money whenever you need is penalty-free. You also have the freedom of choosing the interest payout schedule. Consider reinvesting the interest you earn in a lump sum after maturity.
Consider investing in mutual funds if you want to explore and benefit from the returns of equities and debts. With an option to have a balanced risk portfolio, you can choose where you want to invest according to your risk appetite and preferences. If you want to invest in the share market, it is advisable that you do it through mutual funds, rather than doing it directly. Another way to invest in mutual funds is through a Systematic Investment Plan (SIP). Small regular payments help you be on track with your investments. This can be one of the best savings and investment schemes in India for your child.
Sukanya Samriddhi Account
Sukanya Samriddhi Yojana (SSY) is a small deposit scheme launched as a part of the ‘Bet Bachao Beti Padhao’ campaign. You can deposit money in this account for your girl child and receive an 8.1% interest. You can also avail income tax benefits. This account can be opened at any time after the birth your girl child till she turns 10 with a minimum deposit of Rs 1,000. You can make a maximum deposit of Rs 1.5 lakh in a financial year. This account will be operative for 21 years from its date of opening or till the marriage of the girl after she turns 18.
Child ULIPs come with a triple advantage for you. With this plan, you can get insurance coverage, disciplined investments and equity market returns along with the choice of a rider option. At an eventuality, the sum assured is paid to the nominee. In this case, the advantages of ulip plans are your child, future premiums are waived off and the maturity value will be paid to your child at the time of maturity. This way, you can ensure that your absence doesn’t affect your child’s education and their dreams are fulfilled. It is one of the best savings option in India.
Education Loans VS Personal loans/LAP
|Categories||Education Loan||Personal Loan||Loan Against Property|
|Maximum limit||Rs. 7.5 lakh for Indian higher studies||Up to Rs 25 lakh||Up to 85% of the property value|
|Rs. 20 lakh for foreign higher studies|
|Interest Rate||Between 11.25% and 13.5%||Between 8% and 33% per annum||Between 9.70% and 13.50%|
|Tenor||5 to 7 years||1 to 5 years||2 to 20 years|
|Security||Unsecured||Unsecured||Secured with property|
|Objective||Only for educational purposes that are verified with documents||No need to specify to lender||No need to specify to lender|
Categories Education Loan Personal Loan Loan Against Property
Maximum limit Rs. 7.5 lakh for Indian higher studies
Rs. 20 lakh for foreign higher studies Up to Rs 25 lakh Up to 85% of the property value
Interest Rate Between 11.25% and 13.5% Between 8% and 33% per annum Between 9.70% and 13.50%
Tenor 5 to 7 years 1 to 5 years 2 to 20 years
Security Unsecured Unsecured Secured with property
Objective Only for educational purposes that are verified with documents No need to specify to lender No need to specify to lender
With the above comparison, it is clear that though education loans are made with a purpose, you can avail more benefits by getting a personal loan or a loan against property.
Now you know the various ways you can save and invest your money to fund your child’s education.
If you are looking for loans to fund your child’s education, Bajaj Finserv offers a host of financial products like personal loans and loan against property. The online application process not only simplifies the process of availing your loan, but also helps you save on time. All you have to do is share a few basic details and check out your pre-approved offer.