Nowadays, parents start investing in advance for the higher education of their children so that they do not need any kind of loan in future. If you also want to create a big fund for your children by investing little money, then you can invest in these schemes.
Planning to fund children’s higher education is an important financial decision, which should be done in a well-planned and structured manner. Mutual funds can be a great option, which can give you good returns over time. Here are some important steps and tips to invest in mutual funds for children’s higher education.
- Child Mutual Fund
Child mutual fund plans offer different types of investment options, such as equity, debt and hybrid. You can choose from the options available depending on your risk appetite and financial goals. Child mutual funds are mutual funds specifically designed to invest for the education and other needs of children. - Equity Linked Savings Scheme (ELSS)
ELSS is a type of tax saving mutual fund, which also exists for investing for children’s education. Investments in these schemes provide tax benefits under Section 80C. By investing through SIP (Systematic Investment Plan), you can invest a fixed amount every month, irrespective of the market conditions. The objective of SIP is to make regular and small investments for a long term. Higher return potential in equity mutual funds. Duration recommended for 5-10 years or more. Investment in this can start from Rs 500 per month. - Public Provident Fund (PPF)
PPF is a long-term savings scheme, which also exists for investment for children’s education. This scheme offers safe investment options and attractive interest rates on deposits. Public Provident Fund (PPF) offers tax benefits and stable interest rates. Public Provident Fund has a tenure extension option of 15 years. Minimum is Rs 500 per year, maximum Rs 1.5 lakh per year. - National Savings Certificate (NSC)
NSC is a government savings scheme, which provides a safe option to invest for children’s education. These certificates are available in different tenures and offer attractive interest rates on maturity. Its benefits are available in tax benefits and guaranteed returns. Also its duration is 5 years. There is no minimum and maximum limit of Rs 100 to invest in it. - Bank Fixed Deposit (FD)
FD is another safe investment option that can be used to invest for children’s education. Its objective is to provide safe and stable returns. Its benefits are fixed interest rate and tax benefits if it is done for 5 years. Its duration is 1-10 years. The minimum and maximum limits for investing in this are as per the banks.
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