Investing in your children's education and future is an important decision for any parent, and the start of a new year is the perfect time to consider your options. In India, there are several investment plans available to help you save for your child's education and marriage, and these plans can provide tremendous returns over time.
Sukanya Samriddhi Yojana (SSY): One popular option for saving for a child's education is the Sukanya Samriddhi Yojana (SSY), which is a government-backed savings scheme specifically designed for the education and marriage of a girl child. The SSY offers a high interest rate of 7.6 per cent per year, which is currently one of the highest rates available on small savings schemes in India. The SSY also offers tax benefits under Section 80C of the Income Tax Act, which means that contributions to the scheme are eligible for tax deductions.
Public Provident Fund (PPF): Another option for saving for a child's education is the Public Provident Fund (PPF), which is a long-term savings scheme offered by the government of India. The PPF offers a fixed interest rate of 7.1 per cent per year, and it also offers tax benefits under Section 80C of the Income Tax Act. The PPF has a minimum investment period of 15 years, and it can be extended in blocks of five years after the initial period.
Senior Citizens Saving Scheme (SCSS): For parents looking to save for their child's marriage, one option is the Senior Citizens Saving Scheme (SCSS), which is a savings scheme specifically designed for senior citizens. The SCSS offers a fixed interest rate of 7.4 per cent per year, and it has a minimum investment period of five years. The SCSS is a good option for parents who are planning to save for their child's marriage in the long term, as it allows for the funds to grow over time.
Also read: Maximize your tax savings with these 5 investment options beyond section 80C
Regular savings: In addition to these investment options, parents can also consider setting aside money in a regular savings or investment account for their child's education and marriage. This allows for flexibility in terms of how the funds can be used, and the earnings can be taxed at the child's lower tax rate.
Post Office FD: Open a fixed deposit account at the post office for your child and earn a guaranteed return of 6.7 per cent per year. With a maturity of 10 years, a deposit of INR 5 lakh will earn INR 9,71,711 upon maturity. Investing for 15 years can earn a total of INR 13,54,631.
