Many parents these days look at the Unit Linked Insurance Plans and children saving plans that insurance companies and fund houses tend to provide. They do provide insurance and some sort of safety comfort for your child’s education, but, the returns are poor. In fact, if you deduct the expense associated with these child’s plans your returns are reduced. If you want to secure your child’s education, expenses in case of your sudden demise go for a plain vanilla term insurance plan that will take care of everything. Following the insurance you can look at the following options to build a solid corpus for your child’s education. Here are a few great child investment saving plans.
Sukanya Samriddhi Account
Another good scheme to invest and which can help build a corpus for your child’s education and is an excellent child investment plan is the Sukanya Samriddhi Account. This scheme offers an interest rate of 8.5 per cent and is tax free. Of course, you can consider this only if you have a girl child. There is also a tax benefit offered under Sec 80C of the income tax act. One has to be careful that this scheme is only for the girl child. So, if you have a girl child and plan to save for her marriage or her education, you can go for this scheme. Again, the lock-in is the only worry, but, then you are building a sound corpus for a longer time. The only problem with this scheme is that there could be revision in interest rates from time to time. The interest rate offered is way higher than banks, which is a big positive. Again, there could be a upward revision in interest rates, when the government moved for a revision later this month.