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Secure Your Daughters Tomorrow With Top Investment Schemes in India

08 Feb 2024

Securing a bright future for one’s child is a top priority for any parent. With society now embracing gender equality, gone are the days when having a girl child was frowned upon. As the landscape evolves towards greater gender parity, governments and financial institutions are helping young girls and their parents, offering them a head start in securing their futures.

So, how can you guarantee financial security for your daughter? It's a simple process: select the best investment plan tailored to her future needs and begin investing while she is still young. Commencing early offers you more time to accumulate a substantial corpus that your daughter can tap into for her higher education, wedding, and other significant life events.

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In India, several investments exist to ensure her financial well-being. From government-backed schemes to equity investments, these investment avenues have various benefits and cater to different risk preferences. 

In this blog, look at the top investment choices available for securing your girl child's future in India.

Sukanya Samriddhi Yojana

Sukanya Samriddhi Yojana is a government-initiated scheme specifically designed to support girls. You can open an online or offline account with a minimum deposit of INR 250 and a maximum of 1.5 Lakhs. Only a girl child below ten can invest in this scheme.

The policy matures after twenty-one years or earlier if the account holder reaches 18 and plans to get married, allowing for a 50% withdrawal of the deposited amount for wedding expenses or educational needs.

It offers an attractive 8.0% interest rate on minimum deposits and EEE tax deduction status, ensuring tax-free contributions. 

National Savings Certificate 

The National Savings Certificate (NSC) is a low-risk investment scheme available at post offices across India, offering a steady and guaranteed return on investment. With a current interest rate of 6.8%, the NSC aims to provide a reliable source of income and definite returns for your girl child. 

This investment option features a maturity period of 5 years, making it a suitable choice for individuals looking for a stable and tax-efficient savings avenue. Investors can enjoy tax benefits of up to 1.5 lakh under Section 80C of the Income Tax Act, making it an attractive option for those seeking both security and tax advantages. It requires a minimal initial investment requirement of just 1000 INR.

Public Provident Fund 

The PPF is a secure, long-term investment option tailored to secure your child's financial future. To open a PPF account, you need an initial deposit of INR 500, with an annual maximum deposit limit of INR 1.5 Lakhs. The PPF matures after 15 years and requires at least one annual deposit, allowing flexibility for lump sum payments or instalment options. 

PPF offers a fixed annual interest rate of 7.1%, subject to quarterly government revisions.

Children Gift Mutual Fund

One of the promising investment options for securing your girl child's financial future is through a mutual fund. This scheme offers a balanced mix of equity and debt investments, potentially yielding attractive returns as high as 20% over a 10-year tenure.

While it does come with a lock-in period that enhances returns, there is no provision for premature withdrawals. This investment option enforces a restriction period of 18 years, providing ample time to plan strategically for your girl child's future financial needs. 

The benefits include building long-term financial stability for your daughter through this investment plan. It also offers maintaining a tax-free status until redemption, offering tax advantages to investors.

Post Office Time Deposit

The Post Office Time Deposit scheme presents various account options based on different tenures, ranging from 1 to 5 years. Joint accounts can accommodate up to three individuals. 

The scheme offers competitive interest rates ranging from 6.9% to 7.5%. What makes this scheme particularly appealing is its low initial deposit requirement of just INR 1000, making it a convenient choice for securing a child's financial future. 

One major benefit is that the government backs it. This ensures investments are safe from market fluctuations. It also offers the flexibility of transferring accounts between post offices and tax deductions under Section 80C if the account remains active for five years.

Conclusion 

It's important to note that all the investment options mentioned earlier, except Sukanya Samriddhi Yojana, equally apply to a boy child. 

Investing in financial instruments for your children's future is a crucial step towards ensuring their financial security and helping them achieve their long-term aspirations. India has taken significant strides in promoting the well-being of girl children, resulting in financial institutions introducing a range of products tailored to establish a financial safety net for their future.

Nonetheless, it's essential to carefully assess your financial needs, affordability, risk tolerance, and investment horizon when selecting the most suitable product for the well-being of your girl child's future. Once you've made your choice and acquired the investment, it's equally important to stay committed to it to reap the full range of benefits it can provide over time.

 

Related Articles: How to Open a Demat Account Without a Broker | Factors to Keep in Mind While Opening a Demat account | Factors to Consider When Opening a Demat Account 

 

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