Ensuring a child’s financial security has become more important than ever. With education and healthcare costs steadily increasing, parents must choose investment options that balance safety with steady growth.
Here’s a look at three smart investment options parents can explore.
SUKANYA SAMRIDDHI YOJANA
The Sukanya Samriddhi Yojana (SSY) is a popular government-backed savings scheme for securing a girl child’s future. Introduced under the Beti Bachao Beti Padhao initiative, it offers tax benefits as well as the highest interest rate among small savings schemes.
Currently, SSY provides an interest rate of 8.2%, making it one of the most rewarding long-term options for parents.
An account can be opened with just Rs 250, and the scheme matures 21 years after the account is created. This makes it suitable for long-term goals such as higher education or marriage.
FIXED DEPOSITS FOR CHILDREN
Fixed deposits (FDs) continue to be a trusted choice for many families who prefer low-risk investments. FDs offer guaranteed returns and higher interest rates compared with regular savings accounts.
Some banks provide special FD schemes designed specifically for children, often with slightly higher interest rates. These schemes help parents put aside a lump sum that grows steadily over a fixed period, giving children a reliable financial cushion.
NPS VATSALYA YOJANA
The NPS Vatsalya Yojana is a unique option for parents wanting to build long-term wealth for their child. This scheme allows parents or guardians to open a National Pension System account for a minor.
Once the child turns 18, the account automatically shifts to a standard NPS account.
The minimum yearly investment is Rs 1,000, and there is no upper limit. The interest rate ranges between 9.5% and 10%. Since the money stays invested for many years, it benefits from the power of compounding, helping children build a strong retirement corpus from an early age.
Choosing the right investment scheme can make a big difference to a child’s future financial security. With a mix of government-backed and low-risk options available, parents can start early and build a strong foundation for the years ahead.
