Children plan

POSTED BY Sarav ON January 29, 2013 3:34 pm COMMENTS (4)

Hi Manish,

I would like to save some money for my kid for his educational purpose. He is now 1.5 years old. I am not sure which path should i take…

FD or RD or mutual fund or buy bonds etc..

Can you help me to understand which are the ways will benefit me to save as well as withdraw at any time. If possible, i can use this for tax purpose also.

After reading your blogs, i totally not interested in buying any child plan or LIC policy


4 replies on this article “Children plan”

  1. Dear Sarav, if you want to avail tax benefit also, the choice ‘ll be limited to PPF & Tax saver funds. Rest already discussed by dear Ramesh & dear BanyanFA, hence not repeating.



  2. BanyanFA says:

    You can start your own Child Plan. On a high level you need to :
    1. take a term insurance, critical illness cover and medical insurance;
    2. Invest on a regular basis on instruments such as Mutual Funds / PPF
    3. Write clear instructions for your nominee / spouse to take specific actions in the event of death of the bread earner.
    4. How to invest the lumpsum proceeds in event of death to provide regular source of income for the child.
    You can get further guidance on the topic by reading


    1. Sarav says:

      Hi Banyan,

      I gotta question here. What is the difference between critical illness cover and medical insurance.
      If my company provides medical insurance for me and my family. Do i need to go for medical insurance again.

  3. Ramesh says:

    Start with either a conservative kind of equity fund (like Franklin Blue Chip / Franklin Prima Plus) or with an equity oriented balanced fund like HDFC Balanced, HDFC Prudence, FT Balanced.

    RD/FD/Bonds are not the best choices for >15 year investment horizons.

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