How to plan for a child's education? I have been doing some research on this topic on the web and in 9 out of 10 cases, the verdict is "never buy a child plan" offered by banks and other MF companies. So what are other options? I am inclined on starting a PPF account.. investing 1.5L per year for 15 years.. returns around 46L after 15 years. My target is 70-80L in 15 years. God only knows how much it costs to get a medicine degree in 15 years time..
I have a hunch that the ceiling age for withdrawing or benefitting from ppf would be after retirement because that is what the instrument is for. even at 15yrs say you are 50 you may only be able to withdraw partially. i would use ppf and also look at other avenues there. the power of compounding is great. the other day i read invements and asset building should be like a test match and not like a 20-20..but i also believe the same depends on our risk appetite. since you have 15 years time, then you should look at diversified portfolio of investment. you can invest in the market through sip, invest a part in assets (you have a long term of 15 years), look into certain cumulatives deposits schemes that look good where you need the money only after a particular time.. you can take a term plan, even in child plans but need to read the offer document clearly on the loading, the charges. I am not doing any of these for the education plan as i need 100% liquidity
Ppf is a good option which you can take out after fifteen years and Mutual funds are also good options - invest in growth plans . Redeem in regular intervals and deposit in safe avenues . there is a monthly income scheme combines with RD in post office . It used to be very good earlier but I guess rules changed . Check for latest rules and park your funds here for a risk free return Stay away from ulips and I think most child plans are ulips
@Shanvy Thanks for reply.. Yes, SIPs are an option.. but which one to choose, that's another dilemma.. we consulted a financial analyst and he suggested certain SIPs, starting with modest 5-7.5K per month. Now coming to PPF, even if govt raises the ceiling time, we have the option of partial withdrawl after 5 years.. My hunch is some stupid finance minister will also impose tax on PPF.. @armummy RDs used to be good.. but now they have started TDS on returns.. RD is not a good bet for long term planning
@indoc yes you can do partial withdrawal and I hope tax does not come into play with this instrument. And most interests are taxable. Even tax free infra structure bonds are a good option but the interest rates depend and also lock in period. There are some company bonds like ktdc, omaxe where interest rates are above 10% but do your research well. when I talked about bank cumulative I was suggesting something that I had in my bank. saypay 5510 for a period of 100 months and your maturity value was 10lacs. sip directly into blue chip stocks is advised by many.again depends on your risk appetite even Kisaan Vikas patra is back. all said we will be paying taxes one way or the other.
@indoc, you can withdraw the full amount at the end of 15 years in PPF. I too value this instrument as it has maximum security and no tax on interest (atleast until now). I hope it stays that way. Blue chip stocks have earned a handsome return for many. You could start a SIP in infrastructure stocks or Mutual funds and withdraw after a couple of years (until Modi is in power).
@Shanvy 5510 pm for 100 months and a return of 10L looks attractive.. can you please give me some more details.. is it from bank or post office. And are the returns taxable? And finally can we start multiple schemes on one person.. @butterflyice.. My H has this itch of investing in stocks.. but I am kind of reluctant.. its too risky.. and my H is "financially challenged".. literally.. his idea of savings was buying foreign exchange..
@indoc i do not know if that scheme is still there. it was with one of the nationalised banks..i think it was 10 year and not 100 months that is 20 months more....there were two schemes. do check with your bank. and i also have a teasing memory that some cumulative deposits are exempted from tds. look at this plan in icici..Tax Saving FD, Tax Saver Fixed Deposit, Interest Rates - ICICI FD NHB you can also look at nsc-ix where the interest rate is 8.8% India Post | Financial Services | POSB | National Savings Certificates (NSC) As i have time and again suggested conservative savings..rd from post office.. a 2000rs for 5 years would fetch 1,49,300/- for 1,20,000 that is around 8.4% . you will not realise that you are doing it. I am not doing blue chip investments. but i know a friend who had invested only in 3 companies. he cashed it and completed his sister's engagement ceremony using that.. You can look into mutual funds holding of blue chip companies. select 10. and do your study of the company, its peer group and pe values, history of performance and decide which is possible to get in and try. P.S. none of these are being adviced. it is a loud thinking only. hope people who are following this thread do their own research and discretion.
Hi Ladies, I would like to know , if we invest in ICICI-young Star Account RD is good/bad. Kindly guide me. Thanks.
