From Sukanya Samriddhi to NPS Vatsalya, PPF…which scheme will make children rich?

Which Scheme Will Make Children Rich: Given the current rising cost of education and healthcare, parents have begun to secure their children's future. Parents begin investing in their children's names as soon as they are born, hoping to help them stand on their own feet as they grow up. To this end, parents are investing in everything from government schemes to stock market-related schemes. Today, we present to you some such child-specific schemes, where parents can invest now to secure their children's future.

 This money can be used for everything from higher education to marriage.

Sukanya Samriddhi Yojana

Sukanya Samriddhi Yojana (SSY) is a government-run small savings scheme specifically designed to secure the future of daughters. Launched under the Beti Bachao Beti Padhao scheme, this scheme offers tax benefits on principal and the highest returns among small savings schemes. According to the latest interest rates, Sukanya Samriddhi Yojana offers the highest interest rate of 8.2% among all small savings schemes.

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Anyone can open an SSY account for their daughter and start investing with just ₹250. The maturity period for this scheme is 21 years from the date of account opening.

NPS Vatsalya Yojana

NPS Vatsalya Yojana is a scheme for minors under the National Pension System (NPS). It allows parents or guardians to open retirement savings accounts for their children until they reach the age of 18. When the child turns 18, the account automatically converts to a standard NPS Tier I account, allowing retirement savings to begin early and grow through compounding interest.

PPF for Minors

The Public Provident Fund (PPF) for minors can be an effective way to build a long-term savings fund for a child's future needs. Some of the key features of a PPF account include a 15-year lock-in period, tax benefits, and compound interest. Partial withdrawals are possible only under specific circumstances, and the funds must be used solely for the minor's benefit.

Recurring Deposit Schemes for Children

Many banks offer special recurring deposit (RD) schemes for children, which offer benefits such as lower investment amounts and relatively higher interest rates. A predetermined amount is deposited into an RD account every month for a fixed period. Additionally, account holders enjoy a fixed interest rate on their savings. The interest rate may vary from bank to bank.

Mutual Funds for Children

Mutual funds for children work similarly to regular mutual funds, but are designed to help parents invest for their child's future expenses. Some popular mutual fund schemes include the HDFC Children's Fund, ICICI Prudential Child Care Fund - Gift Plan, Tata Young Citizens Fund, and UTI Children's Equity Fund.

FDs for Children

FDs are generally considered to offer reliable and consistent long-term investment returns, making them a preferred choice among conservative investors. Investors deposit a lump sum amount and earn interest on the total amount. Fixed deposits offer higher interest rates than savings accounts, making them an attractive option for conservative investors.

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Summary

These FDs typically offer higher interest rates; however, this rate may vary from bank to bank. PNB Girl Child Education Scheme, PNB Uttam Non-Callable Term Deposit Scheme, Yes Bank Term Deposit for Children, and SBI FD for Minor Child are some examples of FD schemes specifically designed for children.