5 Ways You Can Plan For A Financially Secure Future For Your Child

Parents should be clear about the financial goals they have set out to achieve and choose investment instruments accordingly.

5 Ways You Can Plan For A Financially Secure Future For Your Child

A child savings account teaches your child how to save money and manage finances

It's no secret now that the pandemic has jeopardized everyone's financial plans. And there is no clear answer to when this uncertainty will end and normalcy will return. In this situation, the idea crossing everyone's mind is how to secure their future and the future of their children. Most experts and financial planners advise people to build a realistic roadmap and start investing early to ensure they accumulate a good sum for demands such as education expenses that are certain to arise.

That said, what are the tools that you can pick to ensure you have the best shot at giving your children a good education and a secure and sound future. All parents should be clear about the financial goals they have set out to achieve and then choose the investment instruments accordingly. There are multiple ways or tools you can choose from.

1.Stocks

A relatively long-term investment tool, the stock market is sometimes considered volatile and risky. But they are one of the best tools as they can give unmatched returns. However, new investors should enrich their knowledge of the market to avoid being on the losing side.

2.Fixed Deposit

This is one of the most popular tools to save money as it gives guaranteed returns at a predetermined rate of interest. Irrespective of the volatility in the market, your investment remains safe. Almost all private and public sector banks offer facilities to open a fixed deposit account. 

3.Child Savings Account

The most important benefit of opening this account is it teaches your child how to save money and manage finances. In addition to that, it allows you to save money for their future. These accounts can be opened for children below the age of 18. But you need to regularly monitor transactions after the account holders get a debit card when they attain the age of 10.

4. Life Insurance

Buying a life insurance policy for yourself is the most basic security you can provide to your family, including your children. In the event of your untimely demise, your family members have the monetary security to meet expenses (education fee) in your absence.

5.Mutual Fund or SIP

You can also accumulate a good sum by investing in a mutual fund scheme or opening a Strategic Investment Plan (SIP) account. An SIP can be started with a minimum investment of Rs 500, giving investors who are short on money some flexibility. The returns can be better than a fixed deposit account.