Ever since we had our second kid, we have started exploring the best options for investment on the children. There are quite a few government schemes as well as private schemes available for investments with low risk and high returns. There is also a slight difference in the schemes if the child is a girl child. We have been discussing this in the house for a very long time. Best investment will give best opportunities for the kids in the future. Let's go through the schemes and options one by one.
Source - Sora
This is a scheme by the central government which gives the maximum benefit for the girl child. The locking period or the maturity period is 21 years. This is mostly targeted towards having a good amount of money for the girl child when they are ready for their marriage. It can be started at any age and before 10 years of age. But sooner the better.
This is the next best investment opportunity for the kids. With parents as guardian, an account can be opened in the name of the kid. Per year a total of 1.5 lakhs can be invested in this scheme and this limit will be shared with the limit of parents if they already have a PPF account. The minimum value for investment is just 500 Rs per year to keep the account active. This is the best scheme for the male kids.
This is always an option. There are a few schemes available targeting the children. People are encouraged to invest in such schemes to cover their expenses on education for the kids. Some people also invest a lump sum amount on the kid and use the interest amount from that for their education. For people who would like to invest money whenever they get something in their hand, this is the best one.
This offers a good interest in the recurring deposits in post office. This is good because a disciple is created to invest some amount monthly on the child's name. There are also other investment opportunities available that are similar to RD in Post Office but none of them matches the interest given by the post office.
All the above investments are safe investments with very minimum risk. It is good to apply for a PAN card for the kid and keep it ready. As they grow up, giving them financial knowledge is very important and they should know how to face the world where finance plays a very important role.
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