May 23, 2014 11:56 am
I wonder what are the best ways to secure my child’s future. Appreciate valuable suggestions of everyone out there.
Welcome to world of parenting. I read about the following steps in some article/blog (not sure) which personally I found meaningful. Hopefully it helps you as well:
Investment for Kids can be bifurcated in three parts:
Birth till age 10: Open a PPF account & start fresh SIPs in Equity MFs.
Age 10 till 15: Keep investing in PPF. Systematically transfer Equity Funds to Balanced funds and invest fresh SIPs in Balanced Funds.
Age 15 onwards: Since 15 years period is over, redeem PPF & and MFs and put them in Debt products (Debt MFs, FDs). For the next 3 years, invest fresh SIPs in Debt products.
Age 18: Redeem your Debt products as the need be.
I also had two apartments that I will rent out as a constant source of income.
The child plans don’t at all consider inflation. After 20 yrs or so you will receive max 6 lacs or so at a huge premium per anum. I am personally doing SIP in some MFs every month and at the same time will open a PPF for my child.
Thank you Hemanth….
I will opt for a PPF account right away.
On the same topic, is taking child plans (the kind of available with LIC, HDFC and others) good enough for children’s future. Do they give good returns ?
I am asking this as I learnt from this forum that endowment policies and those investment+insurance kind of policies (ex: jeevan aanand) are not good. So are these child policies too something like that or are they better ?
As per my knowledge, the child plans also doesn’t give much returns.
Actually my dad has invested in some UTI child plan soon after I born and after 22 years, the return was just around 8%. So, I think they are also not that good.
Better go with SIPs in equity funds, PPF.
1. Take enough term insurance
2. Start a SIP for child’s education; and keep on increasing SIP amount every year.
Thanks Hemanth. That’s exactly what I have in my mind and doing. I just wanted to see if there are different views. Thank You
First please insure yourself.
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