1) Mutual funds SIP

Investing in mutual funds through SIP will help you create required wealth for your children. This disciplined investing of regular amounts in different sectors will help to balance your portfolio.

2) Equity Mutual funds

If you are a young investor and have enough time for childs education, then one can look at investing in equity mutual funds which have not failed to generate returns in long term. Last 3 year returns from some mutual funds has averaged more than 15 per cent.

3) PPF

Public Provident Fund can be one of the safe investment avenues for your kids future. There are many advantages and benefits such as it falls under 80C of Income Tax Act.

Investment in PPF is eligible for EEE (Exempt, Exempt, Exempt). The investment period is 15 years and the returns are tax free.

4) Insurance cover

There are many policy providers who will take care of children's future expenses in an unforeseen event. Many insurance policies provide money to you or your child when they are in the age group of 18-26 years. However, returns from these have always been low.

5) Sukanya Samriddhi Account

The best option would be the Sukanya Samriddhi Account if you have a girl child. The scheme qualifies for tax rebate under Sec 80C of the Income Tax Act. Income is tax free and the interest rates are way higher than bank deposits or most other post office schemes.

6) Children Funds

There are many mutual fund houses have their own funds for children plan. Such as HDFC Children's -Gift Fund, Templeton India Children Asset - Gift plan, ICICI Pru Child Care-Gift Plan. However, the good thing here is the insurance, but the returns are poor.

7) Long term bank deposits

If you have lumpum to invest, you can consider a 10-year bank deposit. If you do not have lumpsum, please go for a recurring bank deposit. The one drawback is that the interest income is taxable.