What is a Child Savings Plan?
It is an investment plan, known also as children saving plan, in which parents select the scheme according to certain characteristics and then make regular payments of the premium amount. The money that would have been used can be saved and can be used to cater for any educational needs for a grown up child or can support any kind of business that the grown up child may want to venture in. It can also be used to buy an asset such as property or any other asset which when invested early enables one’s child to begin building wealth.
It is also a form of saving scheme since, in the event of demise of the parents, the whole amount is paid to the child, which was probably needed for college fees or for other expenditures.
Advantages or CPS or Child Savings Plan
Emergency fund: This investment scheme can be used as an emergency fund if needed as part of the funds can be withdrawn as when the need arises.
Tax savings: If you are an active client of this investment plan and paying the premium, you are able to offset your tax up to Rupees one lakh fifty thousand. Thus, though starting up funds for several children becomes rather a nuisance for parents, it does not turn out to be a problem.
Investment options to be availed under the Child Saving Scheme
SIPs enable you to participate in several kinds of funds, and sometimes, are the most effective saving and wealth creating devices available to you. You have to continuously invest through SIPs and decide which of the funds you already wanted for debt funds, equity funds or hybrid funds.
Child ULIPs are products which offer saving and insurance so that child has all the financial protection in all circumstances. But, it becomes even important to understand the agreement, terms and conditions on one hand and costs relate to this scheme on the other hand.
Wish to start a child savings plan but not sure what the steps are? Contact our experts at Policyinserv, and they will help you create a financial plan through which you can easily achieve your financial goals.
