How SIP became a great investment tool for my child!

The year 2020 has been a year of great loss and tragedies. Something we never imagined even in our worst nightmares. We saw people losing their lives, their jobs, their mental health, new normal and what not. Specially as a parent, my heart went out for the people who had to compromise on the basic needs of their children because of the financial tragedies. I heard so many people who had their children dropped out of schools because they couldn’t afford the fee or some who couldn’t afford an electronic medium for their online classes.

Well, this all has made us realize about the sheer uncertainty of the future and our children certainly shall not be the one to bear on the consequences. That is why i found it quite necessary to talk about the financial security for our children’s future, specially now.

To start with, let me ask two basic questions from you.

  1. Do you have a dedicated fund plan for your child’s future education?
  2. If yes, what are the saving methods you are using?

If your answer to my first question is No, I suggest you to start now. It’s never too late, irrespective of what age is your child is. Even here is an interactive child education calculator which gives you an idea of what your monthly saving should be based on the age and interests of your child.

great investment tool
Child education calculator
Image Credits : L&T finances

Coming to the second question, I would really like to know what are the methods that you are using and why ? For me, I look for these three attributes in a good saving method –

  1. Good return – with so many options available in market offering great percentage of returns. I definitely would like to choose the one with highest return value.
  2. Low risk – While the returns are important, i wouldn’t want to keep my hard earned money at high risk.
  3. Ease of handle – Not many of us are well equipped with financial terms and processes. So my preference will always to have a saving method which doesn’t take much of my time and involves less hassle.

Considering the above, I have listed down a few good options that are available in market and can be a great choice for your child’s savings-

  1. Fixed Deposits – These are no risk, low return saving schemes.
  2. Public Provident Funds (PPF) – These are no risk, average return saving schemes.
  3. Mutual Funds – These are minimal risk, high returns saving schemes.

I have been investing in all of the above schemes and in my experience Mutual funds turned out to be the best of all. Here are a few reasons to share with you:-

  1. Specific to your needs – you can set a goal; a long term or a short term and can have a scheme on that basis.
  2. Choose the risk you can bear – While Mutual funds are a market based investments, you can always choose the portfolio as per the risk you can bear. A great combination of Equity and debt funds can lower your risk and promise a good return.
  3. SIP (systematic investment plan) – One of the great benefits of mutual funds is it’s flexibility of investment amounts. You can either invest a lumpsum amount or can arrange a monthly investment plan based on your goal, which is called SIP. It can start with as low as 500/- monthly which won’t eat out on your pocket and can endeavor to provide good returns. Here is a SIP calculator where you can get the amount you need to invest monthly to achieve your goal amount in given year of times.
  4. Professional management – There are several mutual fund investment companies who offer personalized professional assistance round the clock. All you need to tell them your needs and they will take care of everything without giving you a headache.

I hope by now you might have decided on a saving method which suits you best.

Image Credits: L&T finances

And if you have zeroed down on mutual funds here is a link to L&T mutual funds introduction page, where you can go through all the available fund schemes they are offering. Also the page has immediate chat and call through options that you can choose if required.

Always have the habit of reading the scheme related documents before investing to
understand the scheme type, investment patterns and the risk factors associated with particular investments and consult your financial advisor to understand the implication of any investment

We don’t know the future but at least we can try to secure it for them.

Disclaimer: This information is for general information only and does not have
regard to the particular needs of any specific person who may receive this
information. L&T Investment Management Limited, the asset management
company of L&T Mutual Fund or any of its associates; does not
guarantee/indicate any returns/and shall not be held liable for any loss,
expenses, charges incurred by the recipient. The recipient should consult their legal, tax, and financial advisors before investing. The recipient of this
information should understand that statements made herein regarding future
prospects may not be realized or achieved.
Mutual Fund investments are subject to market risks, read all scheme related
documents carefully.

24 thoughts on “How SIP became a great investment tool for my child!

  • April 9, 2021 at 11:26 am
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    Beautifully researched article, so much enjoyed it

    Reply
    • April 17, 2021 at 5:36 pm
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      I’m not a mother yet. But I’ve heard so much about SIP that I will consider it and try my hand at savings with a greater benefit. Thank you for the information. Very helpful.

      Reply
  • April 10, 2021 at 2:35 pm
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    Childrens’ education is so important and it is vital to plan and save for it, more so with the increasing costs of education. SIP is a great and convenient option for this kind of investment.

    Reply
  • April 11, 2021 at 12:03 am
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    Very well articulated post on mutual funds. We should all educate ourselves on good investment. In this changing scenario, we have to keep all savings options open.

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    • April 15, 2021 at 5:54 pm
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      SIPs is a good and systematic way of saving money on a regular basis. L&T is a good brand name will surely check the details.

      Reply
  • April 11, 2021 at 12:42 pm
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    We have to realize the importance of proper investment for children’s higher education. This is a very helpful article.

    Reply
  • April 11, 2021 at 12:54 pm
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    We are also investing in SIP for a long time now and in fact, have seen steady growth as well and that makes me satisfied that, my kid’s future is safe.

    Reply
  • April 14, 2021 at 6:31 am
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    Couldn’t agree more with your blog post, Already investing in all the 3 options that you have listed, its always good to save and invest carefully

    Reply
  • April 14, 2021 at 12:39 pm
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    Thanks for sharing these amazing tips I recently invested in sip and now planning to invest in IPO’s. And yes I am totally agree on this ‘We don’t know the future but at least we can try to secure it for them.’

    Reply
  • April 16, 2021 at 2:50 am
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    Yes with recent condition, we all feel economically in secure. sip investment sounds like a great investment plan to secure our kid’s future. thanks a lot dear for sharing all details .

    Reply
  • April 16, 2021 at 7:21 am
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    More than fund for education, I think I need to save for survival merely considering the times of today. It’s crazy. I’m trying to get into mutual funds though.

    Reply
  • April 16, 2021 at 8:55 am
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    SIP is the best way to take care of the funding needs of the children. There are many good schemes present in the market, meeting the requirements. But according to me, the corpus should contain both safe and risky investment options.

    Reply
  • April 16, 2021 at 4:55 pm
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    It is indeed so important to begin our children’s financial education from a young age – very informative post!

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  • April 17, 2021 at 3:30 pm
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    This is really interesting and informative! I will share this with my dad! Thank you for sharing!

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    • April 18, 2021 at 7:38 pm
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      SIP is a great tool to build wealth over the period of time and a perfect solution for future financial needs for our kids. We too have done the same for our kids.

      Reply
  • April 17, 2021 at 4:31 pm
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    Oh this is very Informative and helpful! I will look into this! Thank you for sharing!

    Reply
  • April 17, 2021 at 4:59 pm
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    Investment done early is investment done right. I too have written a series of posts on various investment options in India. Thanks for creating such a post.

    Reply
  • April 18, 2021 at 4:05 am
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    Wow, SIP for kids? I was thinking of some investment plans for kids and came across your blog. Love it.

    Reply
  • April 18, 2021 at 11:36 am
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    I have never explored investing in SIP. I have read a lot about them but never invested in them. I think its time I start looking at them and investing.

    Reply
    • April 18, 2021 at 12:06 pm
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      Your post has definitely convinced me to look at the SIPs. I usually invest in Fixed deposits and as you mentioned that the returns are low and I think I will start look at investments that give high returns.

      Reply
  • April 18, 2021 at 12:50 pm
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    I have never invested in mutual funds but I’m tempted now 😊

    Will try investing in L&T mutual funds.

    Reply
  • April 18, 2021 at 6:29 pm
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    SIP is literally a life saver when it comes to anything big. Be it child education, a big exotic trip or even planning a house. Great article!

    Reply
  • April 18, 2021 at 6:45 pm
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    SIP is truly a very good way to savings. I had few earlier. Planning to invest more through mutual funds.

    Reply

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