Your Questions Answered: What are the benefits of child investment plans?

livemint.com:

inflation hitting an all-time high, it has become pertinent for all parents to start planning for their children’s future well from an early age. Education inflation, particularly, is what young parents should be mindful of and start investing keeping in view the coming 15-20 crucial years. It is commendable that you are already investing in traditional instruments like FDs and RDs, but given the corpus, you would need in the future for both your children, you must explore child investment plans.

If you strategically plan and invest in a child plan that matures when your child seeks higher education or gets married can significantly alleviate your financial strains. As a parent, your concern goes beyond wealth accumulation and you also desire future financial security for your children. An Insurance-cum-investment plan can help provide you with both – returns on your investment as well as a safety shield for children.

Since your inclination seems to be more towards traditional plans, you can go for guaranteed plans for they stand out as a popular choice for yielding high returns at no risk. These plans allow parents to build wealth securely and profitably, offering competitive returns as high as 7.5% without the risk of market volatility. As you mentioned that you are a salaried professional, so beyond the potential for wealth accumulation, this plan also offers tax benefits.

This dual advantage of high returns and no risk makes guaranteed plans an attractive option for risk-averse investors. To diversify your portfolio, you can also add Unit Linked Insurance Plan to your investment strategy. ULIPs serve as a dual insurance and investment tool, ideal for securing your children's financial future.