Father's Day 2024: 3 investment options for a Father to secure his kid's future as suggested by an expert
A Father can give a rock-solid foundation to their kids financially if they begin financial planning early in their lives, likewise to secure his kids' future there are options ranging from conventional investment options like PPF to equity-oriented schemes such as the child solution plans.
As we approach Father's Day, falling on June 16 this year, while you as his daughter/son may be scouting for ways to make the day special and memorable for the special person in your life. Father’s who are an integral part of the family can also make an effort on the occasion of this special day to ensure their kids financial security.
As a father, apart from giving quality education and good health to your kids, it is important to start planning for the financial future from the very beginning. Financial planning helps in achieving life goals in an orderly manner. It also teaches kids a disciplined way of life. Investing for kids can be an excellent way to set them up financially when they come of age, be it funding further education, purchasing their first car, or helping them out with a down payment for their first home further down the line.
Here are the few important ways to invest from kids’ perspective as suggested by AmeySathe, Fund Manager, Tata Asset Management-
• Savings account
As a father,having a savings account for kids is important. It helps in teaching the concept of saving money by regularly depositing money received from gifts, prizes etc. This can also help them understand the basics of interest and watching their money grow.
• Child solution plans
Child solution plans allow kids to have exposure to stock market and can create wealth over long period through compounding. Such funds give equity as well as debt exposure to kids over long term. However, such plans have lock in of 5 years or till the child attains age of majority (whichever is earlier). Since they are invested in the stock market, it can have its own volatility hence it’s important to invest in such plans for really long periods of time.
• Public Provident Fund
Father may open a PPF account for their children and contribute to it regularly, this may help in creating a significant corpus for their future needs. PPF accounts have a lock-in period of 15 years, and the interest earned is tax-free.
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