Last Updated on June 30, 2025 by admin
A good savings plan helps you to plan your finances effectively and provide for your family. If you have small children, you must actively consider savings plans such as child plans to meet your child’s future financial needs. Whether you wish to send your daughter to the best university in the UK after she finishes school or create a corpus for your son to start a business when he turns 25, you need to plan your finances well. A child savings plan helps you in this regard. Read on to know more.
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What is a child savings plan?
A child savings plan is a savings plan that you buy with the specific goal of providing for your child. It is a long-term plan, and you make steady investments during the tenure to build up a corpus, which is paid out as the maturity benefit at the end of the policy period. A life cover is simultaneously available, which ensures your child stays financially secure if you die unexpectedly. You can buy a savings plan in India, even if you stay abroad, as it is one of the best options for NRI investments.
Features of a child savings plan
Let us now look at the impressive features of a child savings plan:
Helps meet long-term goals
As soon as you become a parent, you start planning for your child’s future, and you ensure he or she always has a comfortable and good life. For this, you work hard and save money. But regular bank savings may not suffice, and this is why you need to consider the child savings plans. These plans offer systematic savings through regular investments with participating funds, which help you to build up a corpus over time. If you start as soon as your kid is born, you get close to two decades to build up the fund and meet your child’s education costs, marriage expenses and other financial goals.
Offers life coverage
A child savings plan offers life coverage, and this is one of the biggest advantages of this investment. You do not have to opt for a separate life insurance policy, as you get life insurance with it, while your money keeps growing. It is, therefore, considered to be one of the wisest investment options that allow you to meet several financial goals at once.
Available for long durations
As mentioned above, you can buy a savings plan for a long duration. Apart from allowing you to save in small investments, this also provides the advantage of compound interest, which helps your funds to grow faster. Hence, get the plan today, either while you live in India or work abroad and treat it as one of the best NRI investments.
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Available to everyone
A child savings plan is a very affordable investment option. This makes it accessible for people from all walks of life. In fact, it is very useful for those who have a tight budget and cannot spare a lot towards investments. They can save small amounts and still create a large corpus for their children. The Indian savings plans are available for non-residents also, making it one of the most popular NRI investments.
Option of loans
You can partially withdraw the funds from a child savings plan to address any financial emergency. This makes it further beneficial as you can use it as a loan option and save on paying heavy interest to a loan provider. However, remember to touch the funds and make withdrawals only when there is an extreme emergency, as any withdrawal you make may affect your child’s financial future.
Tax benefits
And last but not least, you get some handy tax benefits with the child savings plan. Since it is a form of life insurance, you get a yearly tax benefit of up to INR 1.5 lakhs on the premium you pay. This is available under Section 80C of the Indian Income Tax Act. Additionally, you also get a tax exemption on the maturity benefit under section 10 (10D) of the Indian Income Tax Act.
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The final word
As you can see, there are some amazing benefits of the child savings plan. Whether you wish to see it as one of the options of NRI investments or you want to add it to your Indian financial portfolio, you must do so without any further delay. Your child is the most precious person in your life, and you would do anything to keep them happy and protected, and to fulfil all their dreams. Buy a good child savings plan and comfortably meet all their requirements. Keep the points mentioned above in mind and make a good selection.
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