Best investment plan for your child 2023-24 | Best investment option for kids |

Summary

The video script discusses various investment options for children's future, emphasizing the importance of proper financial planning. It highlights the Sukanya Samriddhi Scheme, exclusively for girl children, offering tax benefits and potential corpus growth. The Public Provident Fund (PPF) is also recommended for its safety and returns, along with the Systematic Investment Plan (SIP) in equity mutual funds for long-term wealth creation. The script warns against unnecessary insurance plans for children and the pitfalls of physical gold investments. Instead, it suggests Sovereign Gold Bonds for a pure gold investment with tax benefits and compounding returns. The video aims to guide parents in securing their children's financial future through smart and diversified investments.

Takeaways

• 😀 The script emphasizes the importance of showing love for one's child by investing in their future through child insurance plans and proper investments.
• 💰 It discusses the Sukanya Samriddhi Scheme, a government scheme specifically for girl children, highlighting its tax benefits and potential high returns if invested properly.
• 🏦 The Public Provident Fund (PPF) is presented as a second investment option, offering tax benefits and a relatively safe return on investment.
• 📈 The third investment option mentioned is the Systematic Investment Plan (SIP) in equity mutual funds, which is recommended for long-term growth and potential high returns due to the power of compounding.
• 🔒 The script clarifies that insurance plans for children are not necessary, as they do not provide financial support in the event of the child's absence, and instead, insurance should be for the breadwinner of the family.
• 👧 The Sukanya Samriddhi Scheme is particularly beneficial if the girl child is under 10 years old, and the investment should be made until she reaches 21 years old, with exceptions for marriage or higher education.
• 📊 The PPF provides a current interest rate of 7.1% and allows for tax deductions under Section 80C, with the interest earned also being tax-free.
• 🤔 The script advises caution when comparing the returns of different asset classes, such as PPF and equity, due to their inherently different risk profiles and investment horizons.
• 💎 It is suggested that physical gold investments, such as Sovereign Gold Bonds, are a better option than buying physical gold due to lower costs and additional benefits like interest payments and capital gains tax exemption.
• 🚫 The transcript warns against falling into the trap of traditional insurance policies sold under attractive names, which may not provide the promised benefits and could be a financial burden.
• 🌐 For those who need assistance in choosing the right mutual fund SIP plans and investments, the script offers help through a team that can be contacted for guidance.

Q & A

What is the main focus of the video script?

The main focus of the video script is to discuss various investment options and insurance plans for children, emphasizing the importance of proper financial planning for their future.

What is the Sukanya Samriddhi Scheme mentioned in the script?

The Sukanya Samriddhi Scheme is a government-backed investment plan specifically for girl children in India, offering tax benefits and a high rate of interest on the invested amount.

What are the tax benefits associated with investing in the Sukanya Samriddhi Scheme?

Investments made in the Sukanya Samriddhi Scheme are eligible for tax deductions under Section 80C, and the interest earned as well as the maturity amount is tax-free.

What is the Public Provident Fund (PPF) and its current interest rate?

The Public Provident Fund is a long-term investment option provided by the Indian government that offers an interest rate of 7.1% per annum, with tax deductions available under Section 80C for the invested amount and tax exemption on the interest earned.

Can one take a loan against the PPF account if needed?

Yes, one can take a loan against the PPF account after a certain period, typically after 5 years from the start of the account, making it a flexible investment option.

What is the Systematic Investment Plan (SIP) mentioned in the script?

The Systematic Investment Plan (SIP) is a method of investing in mutual funds on a regular basis, such as monthly or quarterly, to build a diversified equity portfolio over time.

Why is it not recommended to invest in physical gold for investment purposes according to the script?

Investing in physical gold involves making charges, GST, and may not be a pure investment due to its use as an expendable item. Instead, options like Sovereign Gold Bonds or gold mutual funds are suggested for better returns and liquidity.

What are the benefits of investing in Sovereign Gold Bonds over physical gold?

Sovereign Gold Bonds offer additional benefits such as discounts on purchase, interest payment on the invested amount, and capital gains being tax-free if held for a certain period, making them a more attractive investment option compared to physical gold.

Why should one avoid insurance plans for children according to the script?

The script suggests that insurance plans for children are often unnecessary and can be a misconception. The real need for insurance is for the person whose absence would financially impact the family, which typically is not the case for children who are not income earners.

What is the importance of diversification in investment according to the script?

Diversification in investment helps in spreading risk across different asset classes, ensuring that one's financial portfolio is not overly dependent on a single type of investment, thus safeguarding against potential market volatility.

What is the potential impact of inflation on the expected rate of return from investments?

The script implies that in a scenario where India becomes a developed country with lower inflation, the expected rate of return from investments might decrease, but this should be adjusted properly to ensure that the investments still meet the financial goals.