SSY Vs Child Insurance Plan: Where You Should Invest To Secure Your Kid's Future?

If you're thinking about investing in your child's future, you might have thought or considered Child Insurance Plans or the Sukanya Samriddhi Yojna. However, you might also be confused between the choices. Your selection may be influenced by the amount of money needed, the expected return, and the risk involved.

Why should you start investing early for your child?

Early planning for your child's future can make all the difference. Starting the savings process sooner provides you more time to achieve your financial goals, such as paying for your child's school, marriage, or assisting them in the early stages of their profession.

Sukanya Samriddhi Yojana (SSY)

It is a government of India-backed scheme under the Beti Bachao Beti Padhao initiative. The SSY was introduced to provide a way of saving for every family's girl child in the country. The SSY scheme aims to improve the lives and safeguard the girl child's future in the country. The SSY is valid for 21 years from the date of account establishment or until the girl reaches the age of 18 years and marries.

Benefits of investing in SSY

1. A minimum deposit of Rs 250 is required to start an SSY account. The maximum deposit amount is Rs 1.5 lakh.
2. After the daughter reaches the age of 18, parents can withdraw 50% of the amount to cover school costs. It is necessary to produce proof of admission.
3. Contributions to the plan are eligible for tax advantages of up to Rs.1.5 lakh under Section 80C of the Income Tax Act, 1961. In addition, the interest earned on the deposit is also tax-free.
4. After 15 years, you do not need to make any deposits until the deposit matures, which is 21 years from the date of account opening. The interest on the deposit will continue to accumulate.
5. Premature withdrawal is permitted in exceptional cases involving the requirements of a girl child. Even in the event of the death of a guardian or parent, early withdrawal is permitted.

 

Child Insurance Plans

Child insurance is a type of investment-cumulative insurance plan offered by life insurance companies that provide financial security for your child's hopes and ambitions. You may invest in your child's important life aspirations with a child insurance plan. The Child Insurance Plans are designed to meet the financial needs of children for further education, marriage, and other activities. A good financial plan assures financial assistance for your child at every stage of his or her life. Child insurance policies are designed specifically to fulfill the financial demands of children.

Benefits of Investing in Child Insurance Plans

1. A life insurance policy that pays a fixed sum assured to your kid in the event of an unfavorable occurrence occurring during the policy period.
2. In the event of an unexpected incident, the premium will be waived.
3. A lump-sum payment is made at the policy's maturity to help your youngster achieve his or her long-term goals.
4. As a reward for keeping invested, you'll have more money added to your account.
5. Unrestricted partial withdrawals at no cost.
6. Unlike SSY, Child Insurance Plan is available to both girls and boys.

Bottom Line

Any investment process necessitates some kind of planning. You must prepare the investments that you believe would be beneficial in helping you attain your financial goals, whether it is for a short or lengthy duration. Saving is a crucial aspect of the investment process. You must calculate the amount which you think will be sufficient for taking care of your child's needs. These two investment options can help you build a secure financial future for your child. However, while selecting the investment, consider various factors such as limitation, cash flow, tenure, and the need.