Saving for Children’s education

POSTED BY BLRDude ON September 30, 2010 12:27 am COMMENTS (4)

I would like to save money for my daughter’s education. She is 1 year old now. What is the best means to save for her education? I would like to set aside a little amount every month. I also would like to keep in mind any tax implications for the interest earned. I am not a fan of the investments linked to insurance for kids. Please suggest any other investment vehicles available for children education.

4 replies on this article “Saving for Children’s education”

  1. bharat shah says:

    i suggest to check SIP in a good hybrid-equity oriented mutual fund ,one like HDFC PRUDENCE GROWTH OPTION for the purpose. of course a term insurance is a must. with hdfc prudence, i think, return is better than many diversified pure equity funds on long term , simplicity of investment, and hold with you always .

  2. First judge yourself.

    If you’re not a regular & disciplined investor and you think you MIGHT take your money out in case of emergency or to meet some expenses, blindly go with good ULIP plans. I would recommend SBI life Unit Plus Super with PWB rider. Check out the premium allocation charges & the loyalty bonus given by the company.

    And if you think you will not stop investments even if Sensex goes back to 8000, again, and will not withdraw your money till your child attains 18 years of age, go with equity diversified mutual funds.

    In any way, you need term insurance.

    Hope it will help you.

  3. What goes into your mind when an Investment Advisor talks to you about Child’s higher education or savings for his/her marriage.

    You might have been told about something that LIC offers like “Jeevan Anurag” or “Komal Jeevan”. The private insurers are new kids in the block and they have some fancy name as “HDFC Standard Young Star Plan” or “ICICI Smart Kids Plan”. I find that these are just sales talk and they are nothing but stupid products available in the market.

    So nutshell is, NEVER BUY INSURANCE in the name of your kid. Always take term insurance so that in case anything goes wrong to you, the kid will be financially secured.

    For investment take 2 steps:

    1. Do your home work to find out the expected amount of money required on your kid’s education and /or on marriage. Inflation should not be ignored while calculating future cost of education or marriage.

    2. For young parents, you may consider a combination of SIP in diversified equity fund and PPF. Remember that equity is good when you are planning for long term goals. You may have more equity and less debt in your portfolio.

    Hope this will solve your(I assumed your kids are under 7 years) problem. 🙂

  4. Tarun Jain says:

    Even I am looking for this answer 🙂

    Explored few child plans from various institutions, but they are basically ULIPs and not so great returns 🙁

Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.