Why is it important to start investing early for your child’s future?

Starting early allows investments to benefit from compounding, where returns earn their own returns, leading to significant growth over time.

What are some recommended investment options for children?

SIPs (Systematic Investment Plans), ULIPs (Unit-Linked Insurance Plans), Mutual Funds, and the Sukanya Samriddhi Yojana are popular choices.

What is the Sukanya Samriddhi Yojana?

It is a government-supported savings plan for families with a girl child, offering tax benefits and helping save for education and marriage expenses.

How can parents involve their children in the investment process?

Parents should educate their children about finances and involve them in the investment planning as they grow older to teach them financial management and the importance of saving.

What is the 7 3 2 rule?

It suggests investing money for different goals: 7 years for long-term, 3 years for medium-term, and 2 years for short-term needs. It helps in choosing the right investment type.

At what age can kids start investing?

Children can start investing through a parent/guardian as minors. A Demat or mutual fund account can be opened in their name.

What is the best way to invest money for my kids?

Equity mutual funds, SIPs, Sukanya Samriddhi Yojana (for girls), and PPF are good options. They offer long-term growth and tax benefits.

Can I start SIP for my child?

Yes, SIP can be started in your child’s name with you as guardian. It builds wealth gradually and benefits from compounding.

What is the PM Modi child scheme?

The main scheme is Sukanya Samriddhi Yojana for girl children. It offers high interest and tax benefits for education and marriage.

What is the 7 5 3 1 rule in SIP?

It shows potential returns: 7% in 1 year, 5% in 3 years, and higher in longer periods. It highlights long-term investing benefits.

Which LIC child plan is best?

LIC Jeevan Tarun and LIC Amulya Jeevan are popular choices. They provide savings plus insurance for future needs.

Which investment is best for a newborn baby?

SIP in equity mutual funds, Sukanya scheme, and child insurance plans are best. Start early for maximum growth.

Can I double my money in 5 years?

Yes, with around 14–15% annual return, money can double. Equity funds and stocks can help achieve this.

Which SIP is best for children's?

Large-cap and flexi-cap mutual funds are ideal. They offer stability and long-term growth.

Which plan is best for a child?

Sukanya Samriddhi (for girls), child mutual fund SIPs, and education plans are good options.

Which stocks to buy for kids?

Blue-chip stocks like Infosys, TCS, HDFC Bank, and ITC are safer for long-term holding.

Which is the best age to start investing?

The best age to start investing is as early as possible, ideally in your 20s or even for your child. Starting early gives more time for compounding, helping you build much larger wealth over time.

What is the 7 5 3 1 rule in SIP?

It shows potential returns: 7% in 1 year, 5% in 3 years, and higher in longer periods. It highlights long-term investing benefits.

Which LIC child plan is best?

LIC Jeevan Tarun and LIC Amulya Jeevan are popular choices. They provide savings plus insurance for future needs.

Which investment is best for a newborn baby?

SIP in equity mutual funds, Sukanya scheme, and child insurance plans are best. Start early for maximum growth.

Can I double my money in 5 years?

Yes, with around 14–15% annual return, money can double. Equity funds and stocks can help achieve this.

Which SIP is best for children's?

Large-cap and flexi-cap mutual funds are ideal. They offer stability and long-term growth.

Which plan is best for a child?

Sukanya Samriddhi (for girls), child mutual fund SIPs, and education plans are good options.

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Fund Your Child's Future With These Early Investments

Q: What documents are needed to start investing for a child?

You need the child’s birth certificate, Aadhaar card, PAN card, and a bank account.

Pragya Pathak

Author

Updated: 15-01-2026 at 5:30 AM

Parents always want the best for their children, especially for their future, but often don’t know what they can do to make sure they provide the best. Investment knowledge and effective plans are the best way to ensure that your children get the best of everything. By investing wisely, parents can accumulate funds to support their child’s education, marriage, and other significant life milestones.

Early financial planning for children is crucial for a child’s secure future and for meeting all their necessary needs, wishes, and desires. One of the best tools for investment is long-term investment options, like savings plans that not only protect a child’s future but bring a form of peace to the parents as well. The amount of the savings is not important, but the frequency is, as long-term investment gets accumulated with interest and makes up a substantial amount, so invest for your children's future today!

Read the article to learn more about the child wealth creation options, ranging from its importance and avenues of investment, including answers to popular questions, like ‘What is the recommended approach to managing income and investment?’

Overview

The table below summarises some key details about the child wealth creation options that one should know.

Investment for	Child’s future
Objective	To accumulate funds to support their child’s education, marriage, and other important milestones in life
When to start?	As early as possible
Ideal duration of investment	Long-term
Best early investment strategies for child	Systematic Investment Plans, Unit-Linked Insurance Plans, Mutual funds, govt savings schemes like Sukanya Samriddhi Yojana, etc.

Why Is It Important To Invest At An Early Age?

One of the factors favourable for investment is starting early, which gives the investments more time to grow and can make a big difference over the years. This is because of compounding. With compounding, the returns on the investments start earning their own returns and create a loop effect that helps the investments grow further.

Parents can take small steps today that will lead to big rewards in the future. Investing small amounts regularly might not seem like a lot, but in the future, it will accumulate to a massive amount.

How To Fund Your Child’s Future With Early Investment?

Before starting to invest, parents should first get all the necessary documents. These include the child’s birth certificate, Aadhaar card, PAN card, and bank account. Setting these up is not very difficult and also makes the investing process easier.

After collecting all the documents, they should then figure out specific goals for their investments. They can be for different occasions like higher education, marriage, etc. Planning will make it easier to decide where to invest and how much to put in.

There are many options for investing, especially for children, like a child savings plan India. Let’s take a look at the most recommended and best early investment strategies for child:

1. Systematic Investment Plans (SIPs)

SIPs (Systematic Investment Plans) are one of the long term investment for child options and are one extremely reliable, secure, and ideal. Radhika Gupta suggests that parents should consider investing in 2-3 SIPs each month.

SIPs are very flexible and can be started at just Rs. 500 every month. Since it is not a big amount, everyone can stay committed to the investment plan without straining the family's finances.

2. Unit-Linked Insurance Plans (ULIPs)

Unit-Linked Insurance Plans (ULIPs) combine life insurance with investment options, which can be a great investment for child future. When you invest in a ULIP, part of your money goes towards a life insurance policy that provides a payout if something happens to you. The rest of the money will be invested in different assets like stocks or bonds.

3. Mutual Funds

Mutual funds are a good way to save for a child's future. They invest the money in a mix of stocks and bonds that are managed by experts. This helps spread out the risk and will help you get assured growth over time.

4. Sukanya Samriddhi Yojana

The Sukanya Samriddhi Yojana is a savings plan created for families with a girl child. It’s supported by the government and offers different tax benefits. This scheme helps save money over the long term to cover a girl’s education, marriage expenses, etc.

Radhika Gupta advises parents to involve their children in this process as they grow older. This will not only help the children get knowledge and insight about finances but will also teach them how to manage finances and the importance of saving for the future.

Also Read: Post Office Saving Schemes In India That Are Still Active

What Is The Recommended Approach To Managing Income And Investment?

The ideal approach to managing one’s income with investment is laid out below for one’s reference that people can modify as per their requirements and ease:

One of the golden rules of managing one’s income with investment is the 50-30-20 rule, wherein 50% of the income should be reserved for fulfilling one’s necessities, 30% for fulfilling other personal wishes and desires, and the rest 20% should be invested in savings.
An emergency should be at the top of the priority list of almost everyone, as it is unpredictable and can cause unpredictable damage. Hence, parents should save at least 6 months of their expenses that can come in handy in unprecedented situations.
One of the effective ways of managing one’s income and investment is to regularly check the trends in income so that the investment amount can be increased based on it.

What Is The Maximum Investment Limit In PPF Per Financial Year?

The maximum investment limit in a Public Provident Fund (PPF) each financial year is set at Rs. 1.5 lakh, which is a substantial amount for a child’s future.

Public Provident Fund is a long-term investment scheme that is backed by the government and targets saving through small savings while offering tax incentives along with riskless returns. It is fit for those who want to maintain steady investment returns, which is ideal for the kind of investments parents should make for their children.

What Investors Look For Before Investing?

Certain things to ensure before investing that all investors do are described below in brief points for one’s clarity and better understanding:

Firstly, always be careful about choosing your investment option. If you’re looking for stable returns with no risk of losing your money, invest in government-offered savings options, like savings schemes and provident funds. Also, invest in those options that increase your initial deposited amount steadily and can secure your investment by negative factors of investment, like inflation.
Please check the terms and conditions of all the investment options you are planning to invest your money in. Ensure that the terms are not too rigid but flexible with a practical duration so that in cases of emergencies, you can take out your money with minimal loss.
Parents should invest their money in not a single source, but diversified sources, such as Systematic Investment Plans, Unit-Linked Insurance Plans, Mutual funds, govt savings schemes like Sukanya Samriddhi Yojana, etc. The primary reason behind doing this is to ensure stable wealth creation and distribute the risks, if any.
Tax can be one of the biggest components that can either save your investment or break it. Prefer investing in sources that can use the tax provisions of deductions given through sections, like section 80C.

Conclusion

Parents should always start planning early when it comes to their children. With the help of different investment plans, investing has been made easier than before, as it is not financially straining. This will not only help them stay ahead of future expenses but will also take away the sudden burden dropped on the parents and the children when something big happens.

Also, this saving habit teaches children by demonstration how significant saving for the future is and helps in imbibing the seed of mindful management of finances from a young age. Early financial planning for children and staying consistent with the habit are keys to keeping the children's future safe through monetary means.

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