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Child Investment Plans

Best investment plans for children can help parents secure their child’s financial future. As a parent, you need to plan for important milestones like your child’s education, marriage, and dreams, such as starting a business. ...Read More

Explore the range of investment plans from HDFC Life that suit your needs:

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    Returns that might help you beat inflation

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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 Vishal Subharwal

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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11 Best Child Investment Plans Options

Parents try their level best to provide financial stability for their children. They do not want their children to let go of the best education and career opportunities for want of funds. Financial planning is crucial to achieve this aspiration. Several options for investment towards children in India are available to choose from, and they are:

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Unit-Linked Insurance Plans (ULIPs)

ULIPs are unique financial tools that combine the benefits of life insurance coverage with investment. They offer the dual advantage of market-linked returns along with life cover. As an investor, you can control how your funds get allocated across various asset classes. So, you can invest based on your risk appetite while enjoying market-linked returns. Using a ULIP calculator can help you determine the potential returns and premiums based on your preferences and risk profile. ULIP Policy is a popular choice for that seeking long-term wealth creation, making them a valuable consideration for securing your child’s financial future.

...Read More

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Life Insurance

Along with providing financial protection in difficult situations, life insurance plans can function as a potent investment tool. Policies such as endowment plans offer financial security in case of unforeseen events while ensuring disciplined savings over the policy term. You can customise these plans to meet specific financial goals, including financing your child’s higher education abroad or saving for their marriage.

...Read More

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3

Systematic Investment Plans (SIPs)

SIPs are a systematic and disciplined way to invest in mutual funds. They are particularly suitable for those who may not have a lump sum amount to invest upfront. SIPs allow you to invest a fixed amount at regular intervals, ensuring the benefit of rupee-cost averaging and potentially high returns over the long term.

...Read More

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4

Fixed or Recurring Deposits

Traditional yet reliable, fixed and recurring deposits are low-risk options for child investment. They offer a fixed interest rate, ensuring stability in returns. While the returns may not be as high as some market-linked instruments, the safety and predictability make them a preferred choice for risk-averse investors.

...Read More

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Sukanya Samriddhi Yojana

Specifically designed for the girl child, the Sukanya Samriddhi Yojana is a government-backed savings scheme. There are tax benefits with Sukanya Samriddhi Yojana. This long-term investment ensures financial security for a girl child’s education and marriage.

...Read More

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Gold

Gold has been a timeless investment avenue in India. Many relatives gift newborns gold coins, jewellery and bullion as an investment. Gold is a tangible asset that allows quick liquidation during emergencies. Although the price fluctuates, it is not linked to market ups and downs, making it a reliable investment when the market performs poorly. Gold offers stability during economic certainties, making it a valuable addition to a diversified portfolio.

...Read More

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Public Provident Fund (PPF)

PPF is a long-term, government-backed savings scheme that provides attractive tax benefits. With a lock-in period of 15 years, PPF encourages disciplined savings and can be an effective tool for building a substantial corpus for your child’s future needs.

...Read More

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Bonds

Bonds invest in fixed-income instruments like government securities and bonds. While they offer lower risk than equity-based investments, they still provide better returns than traditional fixed deposits. Debt funds work best for conservative investors looking to balance risk and return.

...Read More

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Real Estate

Investing in real estate can be a long-term strategy for building wealth. While it may not be as liquid as other investments, property values tend to appreciate over time, offering a potential source of funds for your child’s future endeavours.

...Read More

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Mutual Funds

Mutual fund dealers allow you to compare the funds based on different metrics, such as level of risk, return, and price. Also, as the information is easily accessible, the investor will be able to make wise decisions. Besides, Mutual Funds offer benefits in liquidity and professional management.

...Read More

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Debt Funds

A debt fund is a fund scheme that is more inclined towards investing in securities that offer capital appreciation, like government bonds/corporate bonds, treasury bills, money market instruments, etc. Debt funds provide fixed income and are also referred to as fixed-income funds or bond funds. It may be considered while investing   for child.

Debt funds are ideal for individuals who are averse to risk. They offer stable returns, have comparatively high liquidity and are reasonably safe. These are better options than fixed deposits as they provide higher returns and achieve your financial goals in a tax-efficient manner.

...Read More

Why Should You Invest in a Child Investment Plan?


Providing financial stability for your children is the primary reason for how to invest money in child investment plans. The other reasons that make the investment crucial are:

  • Rising Education Costs

    Education is the cornerstone of a successful future. As education costs rise consistently, early investment allows you to provide your child with the best possible educational opportunities without compromising quality due to financial constraints. Robust saving schemes like a child investment plan help secure your child’s financial future.

  • Financial Security

    Life is unpredictable, so you must ensure financial security for your child in case of any unforeseen circumstances. Investment options with an insurance component act as a safety net, guaranteeing financial support during difficult times.

  • Inflation Hedge

    Inflation erodes the purchasing power of money over time. By investing, you combat the impact of inflation, ensuring that the funds you set aside today will be sufficient to meet your child’s future financial needs.

  • Goal-Specific Planning

    Investing allows you to set and achieve specific financial goals for your child. Strategic planning ensures you have the funds to fulfil their educational, marriage and other life dreams.

  • Compounding Benefits

    The earlier you start investing, the longer your money has to grow. Most investments use the power of compounding to amplify your returns and provide exponential growth. Compounding re-invests your returns to create substantial wealth in the long run.
The importance of investing for a Child's Future. The importance of investing for a Child's Future.

When is the Right Time to Invest in Children's Investment Plans?

If you are wondering when is the right time to start saving for your children, the right time to start investing in a children investment plan can be well explained with the following critical factors that are to be considered.

Early Start

Early Start

Long-term investments have the advantage of investing less and earning higher returns. Time is a critical factor in wealth creation. So, the earlier you start investing in the best investment plan for child, the lower the burden on your pocket.

 

Birth or Early Childhood

Birth or Early Childhood

Several child investment plans in India provide the benefit of investment as soon as your child is born. Take advantage and start saving from the day your child is born so that you will have a longer time frame to build a huge corpus.

Stable Financial Situation

Stable Financial Situation

Besides inflation, other expenses like higher education, weddings, etc., can impact your financial goals. It is necessary to start saving early to build a stable financial situation, as the returns will be better.

Goal-Based Savings

Goal-Based Savings

Goal-based savings will help assess the financial requirement at a future date to fulfil goals at different life stages. Planning investment early in a children investment plan to align with each financial goal will help build a corpus adequate to fulfil each goal separately.

Education Planning

Education Planning

The cost of education, from primary education to college education, can rise with inflation. Planning early to provide for education expenses at every level of education is important to fulfil the education goals of your children. 

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How to Select the Best Investment Plan for Your Child?

You can select the best child investment plan by following a few criteria that we have discussed below:

  • Risk Profile

Assess your comfort with investment risks.  While investors who are willing to take on more risk in exchange for perhaps larger profits can choose equities mutual funds or Unit Linked Insurance Plans (ULIPs), conservative investors might choose fixed deposits or Public Provident Funds (PPF).

  • Investment Horizon

Establish the duration of your investment. Since equity investments usually yield larger returns over more extended time periods, they may be advantageous for long-term objectives like higher education. Recurring deposits or debt instruments may be more appropriate for short-term goals.

  • Costs

Examine all related expenses, such as exit loads, management fees, and administrative charges. Over time, lower expenses can greatly increase net profits. For example, as compared to actively managed funds, index funds frequently offer lower expense ratios.

  • Liquidity

Think about how simple it is to get your money when you need it. Some investments provide more liquidity than others, including savings accounts or specific mutual funds, while others, like PPF, have lock-in periods. Make sure the investment fits your projected cash flow requirements.

  • Child's Choice

Engage your youngster in financial planning as they get older. By knowing their ambitions, investments can complement their particular academic or professional objectives, encouraging financial literacy and a sense of responsibility.

  • Financial Discipline

Make consistent contributions to the investing plan of your choice. For instance, rupee cost averaging can help Systematic Investment Plans (SIPs) in mutual funds, which encourage regular saving practices and may eventually increase returns.

Benefits of Child Investment Plans

The following are the benefits of investing in a child plan:

Benefits of Investment and Protection

Benefits of Investment and Protection

Choosing investment plan for childlike unit-linked plans, will give the dual benefit of financial protection and investment. Your child will get a lump sum in case of any eventualities, and the investment component will provide high returns.

...Read More

Tax Benefits

Tax Benefits

The child investment plans in India are life insurance plans. Section 80C under the Income Tax Act 1961 provides for a deduction of up to Rs. 1.50 lakhs in a financial year for these plans. Some plans also offer tax benefits on the maturity/death benefit under Section 10(10D).

...Read More

Sum Received Upon Maturity

Sum Received Upon Maturity

Child investment plans in India provide a lump sum amount on the maturity of the plan. The choice of the time frame for maturity to align with the financial goals is provided.

...Read More

Allows Partial Withdrawals of Funds

Partial Withdrawals

The ULIP allows partial withdrawals of funds to meet emergency financial needs after the lock-in period.

...Read More

Ensures Your Child’s Education Is Covered

Ensures Your Child’s Education Is Covered

A unique feature where the policy remains active even when an uneventful incident occurs. The further premiums are waived. The funds continue to grow till maturity and ensure your child’s education is covered. 

...Read More

Emergency Reserves

Emergency Reserves

The children investment plan serves as emergency reserves with loans available against the policies in times of need.

...Read More

HDFC Life Child Investment Plans 2025

At HDFC Life, we understand the significance of securing your child’s future. We have meticulously crafted our Child Investment Plans to address the diverse financial needs of parents. With a range of options, from ULIPs to endowment plans, we offer flexibility, transparency, and the assurance of a financially secure future for your child.

What are the Crucial Milestones You Should Consider Planning For?

The financial planning for your children’s future should cover the various milestones in their lives. The important milestones to consider are as follows:
Education Expenses of Your Child

Education Expenses of Your Child

Saving for your child’s school and college education should begin early so that the corpus is ready to meet. Start saving early to meet the rising cost of higher studies in India as well as abroad, as it can be overwhelming in the absence of a corpus.

Skill Development and Extra-Curricular Activities

Skill Development and Extra-Curricular Activities

Skill development and extracurricular activities enhance your child’s experience and help reinforce what is learnt in the classroom. Skill development and extracurricular activities prepare your child to meet real-world challenges.

College and University Expenses

College and University Expenses

You should assess the mounting cost of college and university education expenses vis-a-vis inflation and start saving early to have sufficient corpus.

Wedding Expenses

Wedding

You may, at times, ignore this milestone, thinking that it is way ahead. But, deciding how much you would like to spend for this crucial milestone for your child, you should start planning to invest in the investments plan for child early to create a corpus for this vital occasion.

Emergency Fund

Emergency Fund

There can be emergency expenses like a study tour, a science project, etc., which may seem challenging if there is no financial plan available for emergency funds. Several child investment plans in India allow part withdrawal and provide loans against the policy when in need of urgent funds.

View All

Calculators to Plan Your Child’s Financial Future

To help you make informed decisions, we provide comprehensive calculators designed to assist you in planning your child’s financial future.
Child Education Planner

Child Education Planner

The Child Education Planner calculator helps you estimate the future cost of your child’s education based on their current age, the age when they will start the course, the current cost, the inflation rate, and more. It enables you to set realistic savings goals to ensure you prepare for your child’s educational expenses.

Marriage Expense Calculator

Marriage Expense Calculator

The Marriage Expense Calculator aids in estimating the cost of your child’s wedding. It allows you to plan your investments and give your child the wedding they deserve.

Investment Calculator

Investment Calculator

The easy-to-use investment calculator empowers you to plan your investments, estimate returns, and navigate the world of financial security.

Life Insurance Calculator

Life Insurance Calculator

Securing your child’s future is one of your greatest responsibilities as a parent. A life insurance calculator can help you determine the ideal coverage to safeguard their future. By evaluating your current income, debts, obligations, inflation, expenses, and both short and long-term financial goals, you can ensure your family’s financial stability in the face of unexpected events.

View more

Some Expected Tax-Benefit Child Schemes

If you are investing in child plans, you can expect a few tax benefits from them, such as:

  • Deduction under Section 80C

Under Section 80C4 of the Income Tax Act, investments in PPF, child insurance plans, and the Sukanya Samriddhi Yojana are eligible for deductions of up to Rs. 1.5 lakh per year, which lowers taxable income and promotes saving for your kid's future.​

  • Not Having to Pay Tax on Profits

Under Section 10(10D)2 of the Income Tax Act, some child plans proceeds are free from taxes, subject to specified requirements. This maximises the benefits for your kid by guaranteeing that the maturity amount or withdrawals, including those from Sukanya Samriddhi Yojana, stay tax-free. ​

Summary

Overall, early and thoughtful preparation is necessary to secure your child's financial future. There are a variety of kid investing plans available, each designed to help achieve different financial objectives, including marriage and schooling. These plans offer guaranteed benefits or market-linked returns, life insurance, and possible tax benefits under the 1961 Income Tax Act4. Through the evaluation of variables such as investment horizon, risk tolerance, and financial goals, parents may select a plan that fits their child's future requirements.

FAQs on Child Investment Plans

1 What are the key factors to consider when choosing a Child Investment Plan?

The key factors to consider when choosing a child investment plan are risk involvement, the financial goal, tenure, liquidity, volatility, and the credibility of the Company.

2 Can I withdraw funds from a child investment plan before maturity?

Yes. You can withdraw funds from a child investment plan after the lock-in period.

3 Which is the best investment for child?

Long-term investments with both the life cover and the investment component are the best investment plan for child.

4 Can I avail of a loan against child investment plans?

Loan against child investment plans depends on the plan that you are going with.

5 Which plan is best for your child’s future?

The best plan depends on your financial goals, risk tolerance, and investment horizon. ULIPs are ideal for those seeking market-linked returns with insurance coverage. Traditional life insurance and endowment plans provide a mix of protection and savings. You can consult a financial advisor to determine the most suitable plan for your child’s future.

6 How to invest for a 7-year-old?

Investing for a 7-year-old involves considering a combination of factors, including the investment horizon, risk appetite, and financial goals. Child-specific investment plans are popular choices. Tailor the investment strategy based on your child’s future needs and your risk tolerance.

7 What is HDFC Life’s plan for a girl child?

HDFC Life offers child plans that help you build a corpus for your child’s future needs. Our offerings provide financial security for both boys and girls. Parents looking for plans for girls can consider the Sukanya Samriddhi Yojana.

8 Can I open an SIP for kids?

 Yes, you can start an SIP for your child. Many financial companies offer SIP options specifically to help you meet your child’s future financial goals. These plans often have a lock-in period until the child reaches adulthood, helping in disciplined savings for their future.

9 How do I buy bonds for my child?

You can buy bonds for your child through various channels, including banks, financial institutions, or online platforms. Consider government savings bonds or fixed-rate bonds for stable returns. Consult with a financial advisor to understand the best options based on your child’s investment horizon.

10 How to invest for a newborn?

Investing for a newborn involves a long-term perspective. Consider starting with options like child insurance plans, SIPs, or fixed deposits. Remember, a longer investment horizon allows for a more aggressive and potentially rewarding investment strategy.

11 How Can Kids Save Money?

Giving kids a piggy bank or starting a small savings account will help them learn to save. To inculcate financial responsibility from an early age, teach them how to create a budget, stress the value of differentiating between necessities and wants, and provide them incentives for saving money.

12 Which Investment is best for the Next 5 Years?

Conservative ULIPs or balanced mutual funds, which provide a combination of debt and equity exposure to balance risk and return, may be appropriate for a five-year horizon. For people looking for capital protection with modest returns, fixed deposits or recurring deposits are also an option.

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Disclaimer

1. For Single premium, the special addition is 1% of the Single premium at inception only.

2. Subject to conditions specified u/s 10(10D) of the Income tax Act, 1961.

3. Save 46,800 on taxes if the insurance premium amount is Rs.1.5 lakh per annum and you are a Regular Individual, Fall under 30% income tax slab having taxable income less than Rs. 50 lakh and Opt for Old tax regime.

4. Subject to conditions specified u/s 80C of the Income tax Act, 1961.

Tax benefits & exemptions are subject to conditions of the Income Tax Act, 1961 and its provisions. Tax Laws are subject to change from time to time.

Customer is requested to seek tax advice from his Chartered Accountant or personal tax advisor with respect to his personal tax liabilities under the Income-tax law.

ARN  - ED/04/25/22801