Financial Planning for Child’s Future & Education

Recently a reader of this blog asked me a question.

“I want to Invest for my child’s Education & Future. Are Child Insurance Plans good Investment Option to Save? Please Advise.”

Investment for Child’s Future and Education is a wise financial decision. There are several Child Insurance plans available in the market. And many Financial planners advise people to buy child insurance plans.

But well, if you ask me than I am not agree with this funda. According to me, Investment + Insurance = Worst Combination. Rather than that you should go for Term Life Insurance Policy + Equity Diversified Mutual Funds for your child’s future.

Equity Diversified Mutual Funds which are 4-star or 5-star rated can give you excellent returns in the long run. Child Insurance Plans are associated with high management fees and various other kinds of administrative charges.

While the management fees of Mutual funds is very low. So Why not invest in Mutual Funds rather than in Insurance Plans? So in my opinion, everybody should choose 4-star or 5-star rated Equity Diversified mutual funds from sites like Valueresearchonline.com and start investing as early as possible.

SIP is the best way to start. Just remember that, Don’t forget to shift your corpus to Debt Mutual Funds just before 2-3 years of your goal, i mean your child’s 18th birthday.

And yeah, it is advisable to open a separate account for your child. What you can do is, you open a separate minor account for your child and save money in that account and do SIP via that account. This is because if you have account in your child’s name than you will be emotionally more attached towards it and save regularly in that account.

Anyway, So What are you looking for? Start Investing for your Child’s Future Now…!!!