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Best One Time Investment Plan For Child

A one time investment plan is a lump sum investment, a plan that grows significantly over time due to compounding. It is ideal to create a corpus for your financial future. ...Read More

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One Time Investment Plan For Child

Importance of having A one Time Investment Plan For your Child

Best one investment plan for child
June 12, 2024

Table of Content

 

Creating financial security for children is a priority. Choosing the best one time investment for child can be a powerful tool in securing your child’s future. 

A single lump sum investment early in life, grows over time and provides assistance for crucial expenses like education, marriage, or any other significant life milestones. The compounding effect is the advantage of this plan.

A long-term investment maximises the returns over time. It gives you the confidence to meet your child's future financial requirements seamlessly.

Benefits of purchasing a one time investment plan for your child

When you opt for the best one time investment for child, you get a powerful tool to secure your child’s financial future. Here are some of the many benefits of the one-time investment plan for children:

  • Money growth

    • A one time investment for child harnesses the power of compounding to grow money over time. Investing a lump sum amount generates yearly returns over the time. Equity, debt, and balanced funds are prudent choices that beat inflation while keeping your investment safe.

  • Keep your loved ones secured

    • Long term investments with life cover as well as an investment component are the best one time investment for child. In the event of any unforeseen circumstance, the child is financially secure. It also features a life cover that provides a financial safety net, offering peace of mind for parents.

  • Wealth boosters

    • One time investment for child builds a strong foundation for your child’s financial future. An average percentage of the fund value is added to your investment every five years. These are wealth boosters that grow your money without additional investment.

  • Simple Way to Get Money

    • A child investment plan is one of the best investment options. It allows part withdrawal at the end of five years. The rest of the lump sum amount will continue to earn returns. You can withdraw part of the money at any stage without worrying about the lump sum your child receives in your absence.

  • Looking After Loved Ones

    • Investing in life insurance policies safeguards your family's financial well-being, no matter what challenges arise. A plan with life coverage provides a payout to your beneficiary upon your death, allowing them to manage debts, sustain their lifestyle, or achieve future aspirations.

  • Tax benefits

    • Premiums paid towards child insurance plans with a one-time investment option are eligible for tax deduction under Section 80C of the Income Tax Act#. The maturity proceeds are also tax-free under Section 10(10D)#.

The Importance of One Time Investment Plan for Your Child

Being financially prepared to manage expenses at different life stages of your child needs proper planning. The reasons for considering the best one time investment for child are given below:

  • Child's Education

    • Financial planning is essential to meet future financial goals. A child education plan with insurance and investment components is considered the best investment. It offers returns that beat inflation and equips you financially to meet your child’s education expenses.

  • Safeguarding From Unknown Risks

    • An unforeseen event can change the financial scenario for your family. The best plan is one that provides a lump sum to the nominee in case of the untimely death of the policyholder and equips them with funds to manage future expenses.

  • Significant Milestones

    • The good investment would be one that provides part withdrawal facility. It equips you with funds to manage expenses for significant milestones like education, career building, marriage, etc., in your child's life.

Why is the Best Child Plan a One Time Investment?

Parenting is a challenging task. You are loaded with financial responsibilities to manage the child’s expenses at each stage of life. The best child plan entails a lump sum investment by way of a single premium at the start of the plan. This strategy eliminates the need to make recurring premium payments and maintains the continuity of the insurance till maturity without any interruptions. It also gives peace of mind to parents that the corpus is available when needed and the future of their child is secure.  An investment made in a child plan for a newborn can maximise the returns.

How To Ensure The Best Child Education Plan With a One Time Investment?

The best investment plan for child is one that builds a solid financial foundation for your children’s future needs. Consider the factors below before investing in a child insurance plan.

  • Make the Decision Promptly

    • A prompt and timely decision in an investment maximises the returns significantly. Long-term investments use the compounding effect to enhance the yield over time. It ensures a substantial corpus for your child’s future requirements, such as educational pursuits, career building, marriage, or any other major event in various stages of life. By making an informed decision, you can secure your children’s financial well-being and provide them with the best opportunities for success in life.

  • Stay Ahead of Inflation

    • While investing in the best one time investment for child you should stay ahead of inflation, especially with long-term investments. This strategy helps preserve and grow your wealth over time. Stay informed about economic trends to mitigate the erosive effect of inflation rates. Ensure that the sum assured or the return on investment includes the projected inflation rates in the coming years.

  • Waiver of Premium

    • Most child insurance plans have the waiver of premium options. If the plan you choose does not have this option you can go for the premium waiver rider option. In case of any unforeseen event, your child gets the sum assured as well as the waiver of the premium option.

  • Partial Withdrawal Option

    • Partial withdrawal options enable you to access a portion of your funds before maturity without terminating the plan. This flexibility enables you to manage emergencies or fulfil short-term needs while maintaining the continuity and growth potential of your investment.

Getting the Best Child Plan for a Newborn Baby

Investing surplus funds in the best one time investment for child is prudent financial planning. Compare the single premium plans available and choose the one with both investment and insurance components.

Advantages of the One Time Investment for a Newborn Baby

The advantages of the one time investment plan for a newborn baby are:

  • The single premium payment option ensures the continuity of the plan without the scope for missed payments.
  • This plan is ideal for individuals with no stable income stream.
  • The premium paid is much lower when compared to periodical premium payments.
  • You are entitled to tax deductions under 80C and Section 10(10D)#.

How To Choose The Best Plan?

Consider the following before deciding on the best plan for your child:

  • Invest at the earliest to derive the compounding effect to maximise returns.
  • The sum assured must be adequate to cover your child’s future needs. You can use a child savings plan calculator to arrive at the coverage amount.
  • Consider the inflation rate while choosing the investment plan.
  • Look for a partial withdrawal option to access funds during emergency needs.

Summary

Securing the child’s financial future is one of the major parenthood responsibilities. There is no better way than the best one time investment for child that makes funds available for your child to manage different life stage expenses. Consider the factors mentioned in the article for an informed decision and provide the best opportunities in life for your child.

FAQs on Best One Time Investment For Child

Q. Which policy is best for one time investment?

A. A one time investment plan for child started early in life harnesses the compounding effect of the long-term plan and maximises the returns. This comprehensive plan provides financial security while protecting against unforeseen circumstances.

Q. How do you start saving money for a baby?

A. To start saving money for a baby you invest a lump sum in a child insurance plan that grows over a period and secures your child’s financial future. With a part withdrawal facility, this plan provides access to funds to cover expenses at different life stages of your child.

Q. Can I open a mutual fund for my child?

A. Yes. You can open a mutual fund for your child. The return on investment maximises with the long-term compounding. It enables you to create a corpus for the future needs of your child. However, select a fund that aligns with your financial goal and risk appetite.

Q. What is a one time investment for a child?

A. A one time investment plan for child is a lump sum investment, a plan like a mutual fund that grows significantly over time due to compounding. It is ideal to create a corpus for your child’s financial future.

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Francis Rodrigues Francis Rodrigues

Francis Rodrigues has a decade long experience in the insurance sector, and as SVP, E-Commerce and Digital Marketing, HDFC Life, manages the online sales channel, as well as digital and performance marketing. He has had hands-on experience in setting up sales channels and functional teams from scratch over a career spanning 2 decades.

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Vishal Subharwal heads the Strategy, Marketing, E-Commerce, Digital Business & Sustainability initiatives at HDFC Life. He is responsible for crafting and ensuring successful implementation of the overall organisation strategy.

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