Children’s Day 2025: Top Plans to Build and Secure Your Child’s Financial Future

Children’s Day 2025: A great concern for every parent/guardian is to provide a good education to their children, so they can stand on their own. Rising costs and inflation are making it difficult to afford a quality education for their children. Thus, it makes sense for parents to begin investing/saving from the early days when the child is small in order to build a good corpus, which will help pay the child’s expenditures when they grow up.

Every scheme comes with its own structure, features, and way of working. So, understanding how each one functions is key to investing wisely and helping you meet long-term goals.

Mutual Fund Investment For Your Child

Parents can help child open demat account to invest in mutual fund schemes. The guardian can set up Systematic Investment Plans (SIPs) and manage mutual fund investments on behalf of their children. However, payments for mutual fund investments must be made from the child’s bank account.

Income earned by a minor from investments, such as capital gains and dividends, is generally clubbed with the income of the higher-earning parent. The parent is responsible for paying taxes on this combined income.

Once the child attains the age of maturity (18-year-old), the account must be converted to an individual account with fresh KYC documentation.

Sukanya Samriddhi Yojana (SSY)

It is a government-sponsored savings scheme for small deposits that Prime Minister Narendra Modi launched in 2015. As part of the Beti Bachao Beti Padhao campaign, this scheme helps parents or guardians pay for their girl child’s expenditures. SSY’s main objectives are to support girls’ interests in study and lessen the financial strain of marriage.

Public Provident Fund (PPF)

If you already have a PPF account in your name, you can open another one in your child’s name. The maximum amount that can be deposited into both the parent and minor accounts in a single year is Rs 1.5 lakh. In addition to your account, open a PPF child account in your child’s name and continue to make contributions to both.

National Savings Certificate (NSC)

The NSC is a fixed-income plan that is easy to open with any post office and saves income tax. It is an initiative of the Government of India. An NSC account must be opened with a minimum investment of Rs 1,000 and a monthly contribution in multiples of Rs 100. NSC accounts do not have a maximum investment limit. Anyone can choose to invest in an NSC, including children ages 10 and up. Parents or legal guardians may also make investments on a minor’s behalf.

ULIPs for Children

Child ULIPs, also known as unit-linked insurance plans, are specifically acquired for children. In addition to insurance coverage, these plans include investment opportunities to help accumulate money for the child’s future needs. There may be five-year lock-in periods for child ULIPs. Before choosing a term length, think about how long you’ll need the coverage. Popular terms are 20 or 30 years. Based on the chosen fund type, the funds are distributed across debt and equity securities.