Your child is the centre of your universe, and you will move heaven and Earth to make their slightest dream come true. However, the prospect of making some of their dreams come true is beginning to give you sleepless nights, considering the exponentially increasing costs of higher education in India. However, you are loath to push their dreams away for lack of money. Hence, you draw up a roadmap that helps you and your child run past the finish line together towards blazing success. Here are 3 ways to get started:
#1 Buy a child education plan.
The first and most logical step to take in furthering your child’s scholastic ambitions is to buy a child education plan from the best insurance provider in India. Child plans offer a combination of life coverage and savings – one component of your premium goes towards the savings plan, which builds steadily over the years till your child attains the age of 18 years. At this point, the child insurance plan matures and the entire corpus helps you pay for your child’s higher education. Child investment plans keep you out of debt and prevent you dipping into your hard-earned savings by paying the costs of higher education in India or abroad. The biggest USP of the best child plans in India is that insurers waive off premiums in case of the unfortunate demise of the paying parent, but keep the policy active – this keeps your child’s dreams alive in your absence.
#2 Invest and reinvest in a tax-saving FD.
Another instrument to build a large corpus for your child’s higher education and not lose earnings by way of tax, is to start a five-year tax saving FD with your bank. As the name suggests, this FD is not taxed the usual 10% TDS applicable on other FDs if the interest earning on it exceeds Rs 10,000 in one year. Once the five-year FD matures, you can reinvest the money in a fresh five-year tax saving FD. By the power of compounding, the FD corpus grows steadily and you get a large sum of money when you eventually stop reinvesting. This money will help immensely in planning your child’s education, starting from buying prospectuses and filling out applications to various colleges in your city and the rest of the country.
#3 Buy term insurance for yourself.
One of the best ways to ensure that your child’s future interests are taken care of is to buy a good term insurance plan for yourself. The term insurance plan is a life policy that pays a substantial sum assured amount (Rs 1 crore or above, based on the plan and the insurance provider) upon the unfortunate demise of the policy holder while the plan is still active. However, its premiums are extremely affordable and paying for the term plan will not burn a hole in your pocket. Meanwhile, the sum assured will comfortably pay for your child’s higher education in your absence.
Apart from the points mentioned above, you can invest in ULIPs, buy mutual funds and also open a savings account in your child’s name.