Fund Your Child's Future: Strategies For Early Investment
Updated: 28-01-2025 at 6:38 AM
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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. Investments 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 important milestones in life.
Why Are Early Investments Important?
Radhika Gupta, who is the CEO and MD of Edelweiss Mutual Fund, recently highlighted the importance of starting early when it comes to investing for your child's future. She believes that the earlier the parents start investing, the better.
Starting early gives the investments more time to grow, which 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 Start Investing Early?
Before starting to invest, parents should first get all the necessary documents required. 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. Let’s take a look at the most recommended investments.
SIPs
SIPs (Systematic Investment Plans) are one of the most recommended ways to invest in the long term. 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 finances of the family.
Unit-Linked Insurance Plans (ULIPs)
Unit-Linked Insurance Plans (ULIPs) combine life insurance with investment options. 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.
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.
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.
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.
Stay updated with Jaagruk Bharat for updates and insights on latest investment schemes and more.
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