Ways To Pay For Your Child's College Education

Planning for your child's education and securing enough funds can begin as early in life as possible; probably from the day he/she is born. Systematic planning, strategizing, savings and sufficient funds are the first few steps towards deciding your child's career.

Follow these steps to pay for your child's education and ensure a financially secured future.

1) Start early
2) Plan wisely
3) Save and save regularly
4) Be fully aware of your investment options
5) Invest smartly

Here is a list of some of the smart investment options to look into, for your child's education:

SIP with Equity Mutual Funds

This is one of the best options if you are an early bird. Start SIP in two to four equity-oriented mutual fund schemes with mix of mid-cap and large-cap funds. Although, it may appear to be small investment initially, it will be highly beneficial in future when your child is ready to pursue higher education. With enough time, you can study the stock market and ride out the volatility. In addition, this scheme will not only save for your child's education but also give you enough tax benefits.

Fixed Deposits


Be it your parents or your children, fixed deposits are highly dependable and safe when it comes to investing money in a secured way. Parking your money in company fixed deposits ensures higher rate of interest compared to banks fixed deposits. For instance, Bajaj Finance Fixed Deposit helps you earn stable returns on your investment, which is more profitable compared to other financial companies or banks. Investing in fixed deposits for child will enable you to create a corpus fund for his/her higher educational needs.

Sukanya Samriddhi Yojana

This scheme is specially designed by the Government of India to support the education of the girl child. The interest rate offered under this scheme is 8.3%, which is higher compared to any other investment option. Parents can open an account before the girl child turns 10 and deposit a maximum of 1.5 lakh in a year. The investment matures when the girl turns 18, and the fund can be used for her higher education. The Sukanya Samriddhi Yojana account, under Section 80(C) allows you to claim for income tax deduction and returns received from this scheme are tax-free.

Public Provident Fund (PPF)

You can open a PPF account in your child's name. PPF is a 15-year secure investment scheme with higher returns and tax-free corpus. Initially, the contribution can be done by the parents. However, once the child grows up and starts earning, he too, can contribute further. There is a facility of extending this account indefinitely. Meanwhile, if need be, you can partially withdraw a part of fund, any time after the sixth year. However, PPF is a debt investment, inflation-adjusted return would be low, which may affect your process of wealth creation.

Personal/Educational Loan

In case you did not start early, and do not have enough resources to sponsor your child's higher education, don't panic. At this stage, you can avail the facility of personal or educational loan offered by most of the NBFCs or banks. With easy application and instant approval, you can avail funds up to 25 lakhs with low EMIs and flexible tenor.

The onus of your child's education lies on you. Hence, if we are well-prepared from the beginning, half the battle is won. Follow the above-mentioned investment schemes and choose the best one to secure your child's education.

Also Check :- Bajaj Finance Fixed Deposit

Article Posted By : amankhannalView All Articles

Article Source :

http://www.veethi.com/articles/ways-to-pay-for-your-childs-college-education-article-4136.htm

Keywords :

child education , investment , Public Provident Fund , Educational Loan

Comments

Submit an Article

Related Articles