5 Major Investments for Your Child’s Brighter Future

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Now imagine the college fees of your child will be ₹20 lakh in 15 years. Right now, it’s a huge amount, right? But if you begin investing ₹10,000 every month, by the time your child goes to college, you’ll have ₹30 lakh, and all this because of compound interest.

Then there is a 15 lakh personal loan you may take to get investing immediately with the help of your borrowed funds in securing your child’s future.

Here are five smart ways to save for your child’s future in simple steps.

1. Public Provident Fund (PPF)

The Public Provident Fund, or PPF, is a safe government-guaranteed savings scheme offering 7.1 per cent interest per annum. Your savings increase steadily over time. It is a risk-free means of saving.

For example, if you start investing ₹10,000 every month in the PPF account for 15 years, the interest generated may reach ₹30 lakh or more when the child is ready to go to college.

Investment Option Interest Rate Lock-In Period Tax Benefits
PPF 7.1% 15 years Tax deductions under Section 80C

In 15 years, ₹10,000 monthly in PPF can grow into a substantial amount for future goals.

2. Sukanya Samriddhi Yojana (SSY)

Sukanya Samriddhi Yojana is yet another good option where the scheme provides for interest at 8.2%. You can put the investment until she turns 21 years old, derive tax benefits under Section 80C, and the matured amount is exempt from tax.

For instance, saving ₹15,000 in the SSY each year would add up to over ₹7 lakh when she is 21 years old. She could use this to pay for her education or marriage.

3. Equity Mutual Funds

Seven equity mutual funds have given returns of over 20% every year for the last 3, 5, and 7 years. This is among 169 mutual funds that have been in the market for the past seven years.

Investing ₹ 10,000 monthly in an equity mutual fund for 15 years could grow to ₹ 50,00,000 or more, depending on market performance, helping fund your child’s education or other big expenses.

4. SIP (Systematic Investment Plan)

For example, if you invest ₹ 3,000 every month in a SIP for 15 years, with an average return of 10% annually, after 15 years, you’ll have around ₹15,00,000 for your child’s education.

A SIP helps you save small amounts regularly. Over time, the investment grows due to returns. Starting early can build a large sum, securing your child’s future needs like education.

  1. Fixed Deposits (FDs)

FD investors will continue to enjoy high interest rates for now, as the Reserve Bank of India (RBI) decided to keep the repo rate unchanged for the 11th time in its meeting on December 6, 2024.

For example, when you invest ₹ 10,000 in an FD for 10 years, you get the principal with interest.

Although FDs may not increase money at the same rates as PPFs or even mutual funds, they do provide a safe place for keeping money.

Using a 15 Lakh Personal Loan Wisely

Imagine you take a ₹15 lakh personal loan to invest in a mix of PPF, SSY, and equity mutual funds. If you repay ₹30,000 per month over 5 years, the loan will be paid off while your investments grow. 

This allows you to start investing immediately for your child’s future. Just ensure your monthly EMI fits your budget and you stick to a clear repayment plan to avoid financial strain.

Conclusion

One of the best gifts for your child is investing in their future. Whether it’s PPF, Sukanya Samriddhi Yojana, equity mutual funds, ULIPs, or FDs, the key is to start early for long-term financial security and growth.

Let’s take a simple example. You are investing ₹ 10,000 per month in a PPF for 15 years at 7.1% interest. That money may amount to about ₹30 lakh. That money might pay for your child’s education, his or her dreams, or even their marriage.

If you are short of funds, it would be easy to arrange a 15 lakh personal loan and start all investments. So, plan well, invest today, and the future for your child will be bright.

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