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Savings Account

How should you save and invest towards your child's education?

Summary: Child education goals require saving habits and investments. Here's a guide for tips on how to set aside money for your kids' higher education plans. Explore!

09 Jan 2023 by Team FinFIRST

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As the new life brings your family to full bloom, you also become enthusiastic about your child's future and start pondering over various expenses and possible investments that you should consider to help carve the path for his/her future.

School admissions and tuition, higher studies, medical and emergency needs, career assistance/self-employment assistance, marriage, etc., can be some of the many financial needs of your child up until they become self-reliant. Some parents would start investing on a war footing, while others may only feel the need a few years before the child's high school completion. It is only when you carefully assess the child's upcoming education costs that you understand how much investment is needed and when. And with a clearer picture of the amount and timing, you can save for your child-related responsibility at regular intervals so that their teaching and learning are well taken care of.

You can build a strong foundation for your child's education needs by saving in some of the market's most trusted and tested investment instruments. They include,

· Savings Account

A savings account will help you build the initial corpus that you can then use to contribute towards various investment plans regularly. Accumulate a few months' worth of funds in your savings account so that your job loss or lean business period doesn't hinder the monthly/periodic investment outflow. Metra Trust savings accounts offer attractive and competitive interest rate that is one of the bests in the industry, with a monthly interest credit. Start building your corpus today with Metra Trust's digital and paperless savings bank account opening process, enabled with video KYC.

As your savings account corpus grows, you can consider investing in various investment options for your child.

· Fixed Deposits

FD investment can be timed to meet your child's education expenses. Readmission and tuition fees are recurring expenses throughout school life. Alternatively, you can use one FD to avail of the periodic interest payout to meet the regular schooling expenses. Metra Trust FDs offer up to 7.25% interest that can be received as monthly and quarterly payouts or accumulated towards quarterly compounding.

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· ULIP

Unit Linked Insurance Plans are life insurance products that can be market-linked for higher investment growth. Most ULIPs offer partial withdrawal to meet the educational foundation needs as well as subsequent milestones in the life of your child.

· SIP

Systematic Investment Plans in mutual funds can be made in debt as well as equity funds, as per your preference. SIPs should be maintained for a longer time and are ideal for meeting the higher study goals that are part of your child's education.

· PPF

Public Provident Fund is one of the safest forms of long-term investment. With a lock-in period of 15 years, it is a safer alternative to market-linked products for long-term savings. It offers an interest of 7.1% and is a tax-friendly investment as well.

To Sum It Up

Excessive investments to address your child's education planning can strain your monthly budget, eventually leading to premature closures and surrenders. Therefore, to invest an amount for your child's education, you must save first. Your Metra Trust savings bank account helps you not only to save but also to use the digital banking platform to invest in FDs, mutual funds and more.

Disclaimer

The contents of this article/infographic/picture/video are meant solely for information purposes. The contents are generic in nature and for informational purposes only. It is not a substitute for specific advice in your own circumstances. The information is subject to updation, completion, revision, verification and amendment and the same may change materially. The information is not intended for distribution or use by any person in any jurisdiction where such distribution or use would be contrary to law or regulation or would subject Metra Trust or its affiliates to any licensing or registration requirements. Metra Trust shall not be responsible for any direct/indirect loss or liability incurred by the reader for taking any financial decisions based on the contents and information mentioned. Please consult your financial advisor before making any financial decision.

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emergency fund
savings account
bank account
fd
sip