Cheapest Pension Plan: Even Rs 10 a day can give you Rs 47 lakh or Rs 30,000 per month pension

Pension plan: There is nothing like too early an age to start planning your money flow to get a pension later in life. The older we grow, the cost of ensuring a good pension for ourselves, continues to go up drastically. So, why not start right after birth? Of course, a new-born child can't do that for himself/herself. The parents would have to step in till the child grows to an age when s/he can start making the contribution. And what if we tell you that this can be done by investing just Rs 10/day (or Rs 300/month or Rs 3600/Year) right from the day of the birth of the child. 

A quick question arises here: Why should parents think of children's pension? Isn't this supposed to be the other way around. Of course, parents have no business planning for children's pension! But all parents do want financial well-being of their children. And this can be done with just as little as Rs 10/day, thanks to government schemes like Public Provident Fund (PPF), LIC plans and the mighty power of compounding. 

Most of the people know that a PPF account has a lock-in period of 15 years. That means, the money in the PPF account must remain for 15 years for full benefits. What most of the people don't know is the fact that the PPF account can be extended in blocks of five years after the 15 years and it can also be opened in the name of a minor. 

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At the current rate of 8% interest, which is compounded annually, a monthly investment of Rs 300 can turn into a whopping around Rs 47 lakh in 60 years. The interest rate will vary over the years and the final outcome could be different, even higher. An individual can invest a minimum of Rs 500 in a financial year and maximum Rs 1,50,000. 

If this large amount is invested in LIC policies like Jeevan Shanti, one can start getting a pension of over Rs 30,000 per month.   READ MORE about LIC Jeevan Shanti plan

In fact the final outcome could be much higher, may be in crores, if the child increases the amount to be invested in the account when he/she starts earning. 

ALSO READ | Public Provident Fund + LIC plan: Get rich with Rs 100/Day! End financial woes - Pension, Kids' Education, Marriage, House

One may argue that 60 years is a very long time. But then, Rs 10 is also too small a amount you won't mind investing. 

(Online calculators have been used for the article)