Children's Day 2019: This money gift will make your child wealthy; check this money-making list

Children's Day 2019: This gift will give your child a head start in life. It has the potential to transform the life of your child.

Children's Day 2019: A typical child education plan is a life insurance endowment plan. You pay the premiums and get a lump sum at maturity. Photo: Reuters

Children's Day 2019: Today is 14th November and the entire nation is celebrating 'Children's Day.' However, from an investor's perspective, no day can be a better than 14th November to gift one's child an investment plan that can turn her or him into a wealthy person by ensuring a great education. There are several investment plans available in the market but from a children's perspective, an investment should be to give a lump-sum amount to the child after a particular age, or get the required funds for wedding or higher studies. So, the time frame and the amount of investment has to be chosen keeping those investment variables in mind.

Speaking on what should be a better investment gift that parents can think of giving to their child on Children's Day 2019, CS Sudheer, CEO and Founder at IndianMoney.com said, "Gift your child something he or she will remember forever this Children’s Day. An investment plan which will give your child a head start in life is a great option. Transform the life of your children, by giving the right financial advice and lead by example. You can’t be seen splurging and then tell kids to be smart with money. Gift your child an investment plan and sow the seeds of saving and investing at a young age."

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Sudheer listed out the following investment plans that one can think of gifting one's child on this Children's Day - check list below:

1. Gift your children a Child Education Plan

Education is crucial for a great career and a Child Education Plan could be a great gift for your child. It helps meet the expenses of your child’s future needs, even when you are not around. The Child Education Plan is a mix of insurance and investment. The child education plan offers benefits like a financial corpus for your child, life cover and the option of adding riders.

"A typical child education plan is a life insurance endowment plan. You pay the premiums and get a lump sum at maturity, which can be used to meet the financial needs of your children like quality education. You enjoy tax benefits under Section 80C on the premiums paid, up to Rs 1.5 Lakhs a year. Opt for the ‘Waiver of Premium Benefit’ with the child plan. On the untimely demise of the policyholder (parent), the insurance company keeps the plan active and funds the policy by paying the remaining premiums. The money keeps growing and your child gets the money at maturity. Your child’s education won’t be derailed under any circumstances," said CS Sudheer.

2. Gift your child a mutual fund

You can gift your child a children’s gift mutual fund. Many of the top mutual fund houses offer children-oriented schemes, which meet financial needs like child’s education and marriage. These are balanced funds that invest in both equity (shares) and debt (fixed income). You can invest only on behalf of your minor child and the money is locked-in till the child is 18 years. Exit this scheme when the corpus objective is met. You can park this money in an FD till the financial goal date. These funds are risky and know this before making the investment. You may also invest in equity diversified mutual funds through systematic investment plans or SIPs. SIPs are a method of investing small amounts regularly in the mutual fund scheme of your choice. You enjoy compounding returns or return on return and the corpus grows quickly. This is a great investment if you want to send your child abroad for higher education. Equity mutual funds offer high returns, but at high risk. They are known to perform well over a time-frame of 5 years or more. This makes it an excellent investment for your child’s education and marriage.

3. Sukanya Samriddhi Account for your girl child

The Sukanya Samriddhi Yojana Account is a Government of India backed saving scheme, especially for your girl child. The scheme encourages you to build a fund for the higher education and marriage expenses of your daughter. You can open this account any time after the birth of your girl child till she turns 10. The Sukanya Samriddhi Yojana Account currently offers high interest of 8.4 per cent and a tax deduction under Section 80C. Returns are tax-free and this account enjoys EEE benefit.

"Open a Sukanya Samriddhi Yojana Account with a minimum deposit of just Rs 250 at any post office or an authorized branch of a commercial bank. This account remains operative for 21 years after opening the account or till your daughter’s marriage after she turns 18. You can make a partial withdrawal of 50% of the balance after your daughter turns 18 for her higher education," CS Sudheer of Indiamoney.com concluded. He said that Sukanya Samriddhi Account offers the highest interest rate among all small savings schemes. On maturity of the account, the account balance and the accrued interest is paid directly to your daughter. This is a great way to gift her financial independence on Children’s Day.

So, be wise, ensure your child's future is rich in every sense of the term!

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