While a certain degree of discipline is provided to such an investment made specially in the name of your minor child, where you may not be pushed to dip into such deposits in times of want. So, there is magic attached to such a situation and nothing more to it.
What is most important here that your investments are in line with your overall financial goals such as for meeting the higher education needs of your child plus the marriage, which count as the two biggest expenses in such inflationary period. Also, make sure that your asset allocation pattern is done paying due heed to the term you have allocated for your financial horizon and as and when you require these funds, you can easily redeem such investments. So, the investment term should be in line with the tenure you have until your child reaches that specific age wherein funds are required.
Notably, for such investments made in the name of your child, wherein you are the first operator at first for these accounts as and when the child attains maturity, he or she will be given complete access.
2 of the points which you need to note when making savings in the name of minor child :
Income from such an investment made in the name of your child who is a minor is clubbed with your income i.e. the spouse who earns more
Also, the exemption can be claimed up to Rs. 1500 per child annuallly for maximum of two children say if you invest in an FD scheme, then an interest of up to Rs. 1500 for a child is tax exempt.
Some of the savings and investment options that can be good for your child's financial future:
Savings account: This can be a starting point for your child's financial planning and specific savings account for kids have been launched. Money forms an integral part even for a child who needs to be familiarized with personal finance at any early stage and for this savings account for kids could be the best option. Children in case of these accounts on turning 10 are allowed to operate the child on their own.
PPF a/c for minor: Here the parent or guardian can enjoy the income tax exemption on investment, interest accrued and withdrawal and the account can be opened for as low as Rs. 100. All of the benefits that come with PPF account in general are also available to PPF account for minor. And as and when the minor child attains maturity, he or she gains access to the account. Currently, the PPF interest rate is 7.9%, but if you consider the investment for long run you will also gain compounding benefit.
Sukanya Samriddhi scheme : This scheme is specifically for a girl child who are less than 10 years of age and its maturity term. 2 accounts can be opened under the scheme. Here also the investment, interest and maturity amount is exempt from income tax implications. Interest rate currently on such scheme is 7.9% for the October-December quarter.
Equity or SIP route: As when planning for your child's future, you have a longer horizon, you can take to the equity route through the mutual fund SIP possibly for better returns. The risk here should be to the extent you can afford, as any unbalanced move can cost you heavily.
So, follow the asset allocation and diversification rules, to reach a sizeable corpus for your child.