National Girl Child Day: 5 Investment Options To Secure Your Daughter's Future

Every year, 24th January marks the celebration of National Girl Child Day in India. Initiated by the Ministry of Women and Child Development in 2008, National Girl Child Day is celebrated to spread public awareness about inequalities that girls face in our country.

Keeping this in mind, why not take this day as an opportunity to secure your daughter¡¯s future? Read on as we bring to you a list of some investment options which you, as parents, can park your money in, to secure your daughter¡¯s financial future:

5 Investment Options To Secure Your Daughter's Future

investment options girl child/shutterstock

1. Sukanya Samriddhi Yojana (SSY):

With this scheme, parents of girls can save taxes while investing for their girl child's future. This government initiative promotes making investments for the education and marriage of girl child. For every girl child, only one SSY account can be opened. Any post office or approved commercial bank branch can open an SSY account. Anytime between the girl child's birth and the time she turns ten years old, an SSY account can be opened.

The guardian can make deposits and use the Sukanya Samriddhi Yojana account until the girl child turns eighteen. After that, the girl child must operate the SSY account on her own after turning eighteen. An SSY account requires a minimum deposit of Rs. 250 (it was previously Rs. 1,000), which can be deposited in multiples of Rs. 50. The maximum amount that can be deposited in a single financial year, up to 15 years, is Rs. 1.5 lakh. Deposits can be made online, with a demand draft, with cash, or by check. SSY accounts currently have an interest rate of 7.6% p.a. SSY's maturity period is 21 years from the date of account opening or, if she marries after turning 18, 18 years old..

2. Public Provident Fund (PPF)

girl child investment ppf/axis bank

An obvious one on the list is PPF, which is one of the safest investment options. It is backed by the Indian government. The sovereign guarantee supports both the principal and the interest components. The current PPF interest rate is 7.1% p.a. compounded annually, and the Ministry of Finance reviews it every quarter. The fact that PPF is an EEE (exempt, exempt, exempt) investment gives it a significant advantage over many other tax-saving options. Hence, the PPF investment amount, interest accrued, and maturity proceeds are all tax-free.

3. Children¡¯s Gift Mutual Funds

The goal of children's gift mutual funds is to raise money for different aspects of a child's life, like marriage and further education. Mutual funds that fall into the balanced or hybrid category are these ones. Only minors are eligible to invest in children's mutual funds under their names. Mutual funds designated as gifts to children typically have an 18-year lock-in period.

Also note that these funds fall into one of two categories: hybrid equity or hybrid debt, depending on how much equity is invested in. They are classified as hybrid debt if the equity exposure is less than 60%. Otherwise, they are classified as hybrid equity.

girl child day/cry

4. Bank Fixed Deposit (FDs)

Its a no-brainer that bank fixed deposits (FDs) have, since forever, been one of the most preferred investment options in our country. Then why not invest your money in FDs for your daughter¡¯s future? Try going for private sector banks and small finance banks, as they tend to offer relatively higher FD rates than public sector banks.

However, keep in mind that since bank FD rates usually go upto 7%-8% p.a. Do not fully rely on them for wealth creation. Treat them as a safe investment vehicle to park your money, and try keeping them as a part of your portfolio, and not your entire portfolio. You can have FDs as a part of your investment portfolio along with other options such as mutual funds, gold, etc.

5. Different Types Of Gold Schemes

Given that buying gold jewellery is a tradition deeply engraved in many different cultures across the country, many people also treat it as an investment option. But no, we are not talking about the physically jewellery that we tend to usually purchase. T

here are some unique ways to invest in gold without purchasing the physical jewellery, such as Gold ETFs, Gold Funds, Digital Gold, Gold Savings Schemes and Sovereign Gold Bonds (SGB). Click here to understand them in detail.

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