The younger generation these days is quite ambitious with a willingness to pursue college or higher education in the top institutes in India or abroad. However, the expenses of college fees are only rising by the year. According to a study by Assocham Social Development Foundation in 2016 around 70% of parents spend close to 40% of their salaries on their children’s education. Hence, it is very important for the parents to plan their children’s future well in advance to avoid finances becoming a hindrance in the way of their aspirations.
Here’s how various schemes help you plan a corpus for your child’s dream education:
Loan Against Property
Loan Against Property is when you keep your residential or commercial property as collateral. If you avail Loan Against Property offered by various banks and non-banking financial institutions you can apply for a higher amount compared to a normal loan. Through this scheme, a salaried individual can opt for a loan amount up to 1 crore, while a self-employed individual can opt for an amount as high as 3.5 crores. Moreover, it also offers various other features like hassle-free disbursal of loan, flexible tenors, affordable EMIs, and other benefits that will help you manage your child’s educational expenses easily, without any risk or stress.
Fixed deposits have always been reliable and highly dependable investment options. No matter the reason, FDs always comes to the rescue at the right time if they are well-planned in advance. Hence, why not benefit from them for your child’s education? However, FDs get more meaningful if you start investing in it when your children are young. You can start with a minimum deposit of Rs.25000 to secure an FD. The return on investment in FD is higher compared to other investment schemes. As the FD rates in India are higher, you to yield higher returns on your hard earned money. In a way, fixed deposit for child helps you manage financial expenses of the tuition fees and other extracurricular expenses that your child is willing to take up.
Public Provident Fund (PPF)
If you begin investing much early in life and are looking for a long lock-in period (15 years), Public Provident Fund is a good investment plan. In fact, it is a highly beneficial plan as you can start when your child is growing up, and once he/she becomes an adult, after 15 years, you can either withdraw the amount or extend the PPF account. Here, even your child can add some amount and invest it further. Moreover, PPF is a scheme with higher returns wherein you can also avail tax benefits under Section 80C. All you need to do is invest an amount, not exceeding Rs.1.5 lakh in a year, for 15 years to enjoy the benefits of this scheme.
Sunkanya Samriddhi Yojana
Designed by the Government of India, Sukanya Samriddhi Yojana is mainly thought of to support the education of the girl child in India. The rate of interest offered by the scheme is on the higher side compared to other investment options; hence, making it a highly sought after investment option for children’s education. As parents of a girl child, you need to open an account before she becomes ten years of age and deposit at the most Rs.1.5 lakh in a year. You will have access to the funds when the child becomes an adult at the age of 18, after which, you can utilize the amount for her education. Additionally, this scheme also allows you to claim an income tax deduction under section 80C, making all the returns received under the scheme tax-free.
Educational Loan/Personal Loan
If you are too late to read this article as well as invest in your child’s education plan at an early stage, do not lose hope. Educational loan or personal loan can still ease your worry to take up the educational expenses of your children. Most of the banks and NBFCs like Bajaj Finance offer these loans against Fixed Deposits as well at an affordable rate of interest with the online application process and instant approval. Going for this option is a far better way when you are looking to avail a loan in short notice.
Invest in the best suitable investment scheme and give wings to your children’s career!