6 Best Child Investment Plans in India

Best Child Investment Plans in India6 Best Child Investment Plans in India

There are several parents in India, who might be thinking to have a best child investment plan. I got a mail from Ms. Neelima requesting to help with the best child investment plan. She is worried about her 6 months child on how she can create a good plan for his education. It is common that we all worried about child education or money required to do a marriage for our children (it is immaterial now whether you have a daughter or son, the cost of marriage is more or less same). How to do investment planning for your children? How we can secure their future, even during our absence? Which is the best investment plan for child future in 2016? In this article, I would provide you about some of the best child investment plans in India. Are there any one time investment plan for child which is good? What about best investment plan for child marriage?

Are Children Investment Plans necessary?

In this modern world, both husband and wife are working. You start your day in the morning, go to the office, get into calls, meetings, struggle to meet deadlines, targets, unnecessary pressure from peers, etc. You would end up your long day by supporting on-site teams. If you are businessmen, you would spend every minute without having time to breath and end up coming back to home at 11 pm in the night. There is no time for us to think about saving, planning nor about our health. In such situation, it is better to have a plan for your child's future. You should ascertain how much money you may need for your child education or marriage based on current cost and consider inflation of 5% to 7%. 

Also Read: How to invest in Top Performing mutual funds which can help for your child future?

How parents are doing children investment plans now?

While some parents are planning well for their children, some of the parents are blindly taking Unit Link Insurance Plans (ULIP’s). While insurance agents have been cheating investors by selling ULIP plans which charge high allocation and admin charges, due to lack of awareness, parents still believe this as a good investment plan for their children.

6 Best Children Investment Plans in India

1) Consider Additional Term Insurance Plan and balance savings invest in good investment options :

When I said term insurance plan, I am not saying you should take term insurance plan in your child's name. This is an additional term insurance plan you should take in your name for protecting your child's future. E.g. if you think that it would cost Rs 20 Lakhs for your child education in future or for your child marriage in future, you can consider taking Rs 20 Lakhs additional term insurance. For 30 years of age, this would cost you Rs 5,000 per annum. Consider taking it for 20 year period after your child has born so that you can protect your child till his education. Your savings can be invested in  a bank FD or mutual funds so that in case of death of parent, additional term insurance would be useful, otherwise, your savings would help in meeting child education or their marriage goals.

2) Invest in mutual funds through SIP

If you want to create good wealth for your child education or marriage in the future, one of the best ways is investing in some of the best performing mutual funds. You can consider investing in large cap funds and balanced funds. If you still believe that mutual funds are high risk even in the long run, try investing in balanced mutual funds. These are low risk funds, comparing to others. Do you know that Rs 1,000 per month invested through SIP in top performing mutual funds @ 13% annualized returns can fetch you to Rs 2.5 Lakhs in 10 years or Rs 5.5 Lakhs in 15 years time frame. This is the power of SIP in mutual funds.

3) Invest through Recurring Deposits (RD)

Another best and low risk option to create children investment plan is to invest in recurring deposits. Since interest rates are at peak now, one can lock recurring deposits at this rate and create the best plan your children. Do you know that if you invest Rs 1,000 per month in recurring deposit, you would get Rs 2 Lakhs after 10 years or Rs 2.8 Lakhs after 15 years (9% interest rate). Just imagine that if you can invest Rs 10,000 per month, what would be the value of your investment.

4) Invest in PPF

Investment in PPF is one of the best way to lock your money for long term of 15 years. PPF account can be opened for 15 years. You can invest Rs 1 Lakh maximum per annum and expect 8.75% interest rate per annum. Do you know that Rs 100,000 invested in PPF per annum can fetch you a lump sum of Rs 31.30 Lakhs at the end of 15 years which is tax free? You can have your child education done in a foreign university. If you are looking for children investment plans in post office, this child plan can help you (though PPF can be opened from bank too).

5) Invest in NSC

 This is one of the best proven methods for child education plan.  One of my friends has  told me this plan. He started investing in NSC certificates (IX issue, maturity at 10 years) every year for Rs 1 Lakh for tax purpose (80C) for 10 years. His expectation is that from 11th year onwards, he should be free from spending money for child education. He would get Rs 2.34 Lakhs per annum from 11th year onwards for 10 years. What an idea, Sir ji?

Also Read: How to create wealth by investing in National Savings Certificates (NSC)?

6) Invest in ULIP Schemes

While I am not in favor of ULIP schemes, if you are a low risk investor and does not believe in stock market dependent investment schemes, you can look for ULIP schemes which has low allocation and less ULIP charges. You can expect 4% to 6% annualized returns from any ULIP schemes. Don’t get into the trap of insurance agents who promise returns higher than bank fixed deposits or returns which they compare with mutual funds and encourage you to invest in it. Investment in ULIP schemes should be your last option among the other child investment plans. If you are looking for best child plan LIC, you should review various plans available, hence do not jump and invest in one scheme.

Summary: While I have provided some of the best ways, you can consider them individually or in a combination to arrive the best children investment plan which suits you. Take the action today and create the best plan for your child education or for their marriage in future.

Readers, how are you planning for your child's future now? Do you think the above plans are the best ones?

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Best Child Investment Plans in India

Suresh KP


  1. I have 50,000/ rupees…which scheme is best for deposit this amount for 5 yr plan…pls prefer me which one is best for my fixed amount 50,000…. Is any child plan for boy….also suggest me….

  2. Hello, i would like to secure the future of my 5 months old grandson. Please suggest me a best plan of low premium.
    A. K. Jha.

  3. hello ,

    plz tell me the best LIC future plan for my baby girl whose 1 year old..

    Thanks & regard

    Akancha saxena


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