Investing for your child’s future plans is the best gift you can give them in life. This will help them be better prepared for life and learn how to handle issues way earlier in life.
College savings account
Money is deposited into such an account that grows tax-free, according to the state rules, and may remain tax-free when it’s strictly used to pay for tuition.
Investing in brokerage accounts for your child is another great way to invest for your child plans. Such investments are more profitable over long terms and this is a great way to put away your money. It will mature with greater returns when the child is older, and you will be more aggressive over time.
A dedicated child’s savings account
Savings accounts mostly have low interest rates, but they can offer investing classes for the child so that they get wiser with time and can handle money issues better when older. The fees for the accounts are sometimes waived, and no minimum balance may be required.
This is where you secure your child’s education future by paying for tuition in college as they are young, which is then used when they attain college age. This is cheaper and convenient s fees rise with time.
Child trust fund
This is one of the popular child plans that parents use to secure their children’s future. It is a long term savings or investment account for children. They were created to make sure that children had savings by the time they reached 18 years, while teaching them the benefits of savings and understanding personal finance along the way. There is an initial subscription from the government and family and friends of the child are able to top up the savings over time.
Child insurance plans
These are meant for the children for various sectors like education, health and life insurance. They financially secure the child’s future and finance their turning points, like higher education and also marriage. They will be able to secure their life upon the demise of a parent or guardian or when the guardians can no longer work and generate revenue.
Child education plan
They can be for high school or college education where it will cater for their fees and accommodation. Terms and conditions here may be a limit to the entry and maturity age, or the minimum sum assured, research well before settling on a specific plan. There are different plans with different benefits so choose what you prefer.
Figure out the expected college fees and choose a plan that will give you a similar return after the maturity period expires.
How to calculate child education plan by using child education calculator
The child education calculator requires several types of data to calculate the education cost of the child. They include; current age of the child, inflation rate per year, number of years before tuition begins, value of current savings, current monthly contributions towards savings and the expected annual growth of savings.
There are several online tools to help you calculate by merely entering the details above and they calculate the costs for you.
Related: Short Term Investment Options