3 simple steps to financially secure the future of your newborn child this New Year

As a new parent this New Year, there’d be a million dreams in your heart and there’d be a lot of things that you’d be thinking of. However, one of the most important things that you’d be thinking of is about how to secure the future of your child. That will be a great beginning to the New Year.

Here are 3 simple things that you can do the moment your child is born to secure the future of your child. Can there be a better way to start a New Year than taking big steps towards securing your newborn baby’s future?

 

Increase your financial protection

Just as a cricketer would wear pads, gloves, helmet, and other protective gear to better prepare to face up to the adversities bowlers have got to offer, you need to do the same. So, you can take the first step towards securing your child’s future through increasing your life insurance coverage. As a thumb rule, you can increase your life insurance coverage to at least five times your annual income.

This will go a long way in ensuring even in case of an untimely event, your child’s future will go just as per your plans without much hassle. One of the best insurance products that you can consider is the term plans. These provide you with large life insurance coverage with low premium. Moreover, premium tends to be even lower if you buy your term insurance plan online.

Moreover, you need to increase your coverage of your health insurance and ensure that your newborn child comes under the coverage. This will ensure that in case of any future unforeseen event, your savings will not take a hit. Thus, this will ensure that you will not disrupt your investment plans for securing your child’s future.

 

Having a separate avenue to park the money set aside for your child’s future

One of the best ways of ensuring that you will not dip into the money apportioned for your child’s future is to create a separate savings bank account for your child. You can park all the money that you have set aside for your child’s future here. Moreover, many people also consider parking this money on debt funds, which will definitely give you better returns than bank savings, while being a secure investment source.

Moreover, a separate avenue to park the money is a nice way to ensure that you are focused, know the objectives, and will not use that money for any other purpose.

 

Start making the investments

You can look at avenues such as NPS and in case of a girl child, Sukanya Samruddhi Scheme. However, given the rate at which cost of education is increasing, these two along with bank FDs just won’t be enough. That’s why you can’t just think of debt, you will have to look at equity options as well. Investing in mutual funds through the SIP route is one of the best ways to do this. You can start comparing the one-year, three-year, and five-year performances of equity mutual fund schemes. Match them with their benchmark and peer funds, and choose your fund to invest. You can keep adding more schemes, going forward, as your income increases.

Moreover, there are a few good child SIP plans that you can glance through. Please note that an equity SIP investment, be it Rs. 1000 or Rs. 5000 per month, will give you much higher returns compared with any other form of investment.

 

ACMIIL has made financial planning and investment easier

ACMIIL has come out with a state-of-the-art Investment App. The app helps you set your financial goals, timeframe to achieve them, analyzes risk profile, helps you set up financial goals, and make the correct investment choices to achieve those goals.

The Investmentz App (available on App store and Play store)  is your end-to-end investment partner. It carefully handpicks the best mutual fund options that suit your risk profile and will help you meet your financial goals within your planned timeframe. Moreover, the app helps you monitor your goal progress, which enables you to make the relevant changes to your investment plans, where necessary.

The app will help you in creating a well-diversified and balanced portfolio based on your risk profile and time frame. Moreover, you can availthe advisory services of ACMIIL’s retail research team, which will provide you with timely stock recommendations, market updates, new offers, and much more.

Happy New Year!

Disclaimer: Investment in securities market are subject to market risks, read all the related documents carefully before investing.

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