So what are the best options for little ones?
Almost every bank in the country runs special fixed deposit schemes for children. Even the insurance companies in India offer several interesting schemes for children. A number of fund managers have investment plans targeted at the children‟s savings market. Unit trusts are also available. The only practical difference is that childfriendly plans usually allow smaller monthly and lump-sum investments.
Every bank offers an account for juniors, and many come with freebies and giveaways, such as stickers, posters and cuddly toys. It‟s the interest rate you should focus on as you introduce the youngsters to the delights of compound interest.
Parents can also set a good example by encouraging banking habits in children and get them to save their pocket money in a bank or society deposit account. The great attraction of saving for children is that, provided you get started early, time is on your side. My friend Sarada doesn‟t allow her son to accept any birthday gifts from his relatives.
Instead she requests them to give gift cheques which she deposits in her son‟s fixed deposit account. 'He gets all the toys he wants from us, and his investment is growing every year‟, she dimples. Gifts are a great way to save. Grandparents can help in this effort. Your savings for the young relative in your family can buy them their first computer, or just multiply and help them buy a car or put down a deposit on a flat!
Acting now could help prevent some costly bills in the years to come. So, consider opening an account in your child‟s name. You retain control of the investment until the child reaches 18, when they can take control of the money. Investing now will do a world of good for him tomorrow.
Contact your portfolio manager right away.
