Along with the bundle of joy that comes with your baby’s arrival, also comes a bunch of responsibilities as a new parent. In the initial years of your child’s growth, perhaps you may want to set aside an amount every month or every week as savings.
However, it is essential to make plans for your child’s financial needs. The best approach would be to make financial plans, based on your immediate short-term and other long-term investments.
It’s always better to come up with a short-term investment plan before the baby’s arrival. In the initial ten years, your child’s needs would include regular vaccination, medical expenses, clothes, education and other small expenses. Apart from child insurance and a legalized will, you may also start saving the surplus amount from what is left after the child’s expenses.
In the initial years, children may even inherit certain assets or trust fund from relatives and friends. It is up to the parents to manage it well enough for the child’s future needs. In order to meet these expenses, one could try to invest in debt funds, other short-term funds or even a fixed deposit.
Sometimes, due to fear of peer pressure or social stigma, parents tend to take bigger risks on investments or end up taking expensive personal loans. Fortunately, there are better options for them to choose from and they could always seek professional counsel to know more.
After taking care of short-term investment, you should focus more on the necessary funds for a child’s higher education expenses and for marriage. As a parent, you would wish to save enough for their children’s wedding and even secure their future further. Taking care of these essential expenses needs proper planning and execution.
Fixed Deposit for Child’s future:
Apart from mutual funds and child insurance, a proper long-term fixed deposit is essential for the overall welfare and the security your child’s future. While it is always wise to diversify investments, a specific plan or investment in child-related schemes and funds should be the top priority for any parent. FD (Fixed Deposit) offer the required element of stability to your investment portfolio. It is also a preferable form of investment among the Indian masses and rightly so, as it offers guaranteed returns. Nowadays, there are many options apart from the traditional fixed deposit. These newer options offer many benefits and flexibility in terms of returns and repayment tenor.
NBFCs fixed deposits offer 8.40% interest rate as compared to the 6-7% available on regular fixed deposit schemes. You can begin immediately by depositing just Rs. 25,000, which grows periodically. You can also extend the maturity date of the Fixed Deposit according to your requirement. you also have the option to withdraw the amount in case of emergency expenses, but you will not be able to avail the full extent of the available benefits. NBFCs even provides you with a loan on your Fixed Deposit scheme in case of a financial crunch. It is a hassle-free process, which assures high returns on investments.
It is always advisable to start investing in fixed deposits early to ensure that your child will have a bright future. NBFCs also provides a FD calculator on their online portal to help you calculate the fixed deposit returns before making an investment. Smart parents are the ones that take effective measures at an early stage by ensuring the future availability of funds for the bright future of their children.