Child Investment Plans for their better and safe future
The benefits of investing in your child’s name
Every parent wants to invest some money for their children’s future but they do not know the benefits of such kind of investment. According to a financial expert, one should do financial planning with investing money by the child’s name. So here are the few child investment plans and the benefits of such kind of investments.
Investment with Public Provident Fund Account
If you want to accomplish your financial goal for children’s future, an investment with Public Provident Fund can be the best option for you. A person who is paying the tax can invest in public provident fund account as a parent by the name of his/her child. If you do such kind of investment there can be one account for one child and you are allowed an investment maximum of 1.5 lac during any financial year. Such kind of a investment is acceptable as a subtraction under section 80C, in that case when a parent has more than one PPF account of his own name and the name of his child then 1.5 lac would be the higher tax deduction and higher contribution in both account that is under section 80C. So the public provident fund has been granted the EEE status that is Exempt-Exempt-Exempt and tax-free interest is received.
Investment with bank accounts.
If you are planning to secure your child future then investment with a bank account can be the best option for the guardians. One can invest in fixed deposit and savings bank account in his/her child’s name. Investment earned from both accounts will be collected by the parents and subject to the tax. In the case when parents are planning to invest for their minor children’s future, then they can claim an exemption of Rs 1500 Rs in respect of the income under section 10(32) and when the investment has been made in FD, parent will be suitable to claim a deduction under the section 80C and its higher limit of 1.5 lac.
Investment in child insurance plans.
Parents can secure their children’s future by investing in child insurance plan that will also give the financial support to the family, with such kind of investments parents can get tax benefit on the premium paid.
Investment in Sukanya Samriddhi Yojna Account.
If you are a parent of a girl child who is below the age of 10 years, you can plan for your girl child’s future by opening a Sukanya Samriddhi Yojna with any post office and any bank. One can contribute a minimum of 1000 Rs. and maximum 1.5 lac for a period of 15 years from the time when you opened the account.