Every parent is worried about the future of children. Studying whether at the basic level or higher level is very expensive. Parents also try to save the necessary amount for this. But there is an important issue about which people are less aware. This issue is to convince children about things like earning and saving. The effort of every parent is to save for the good future of the children. The biggest problem in this direction are those products, which are being sold exclusively in the name of this cause. ‘If you love your child, buy our product.’ This is a very simple, straightforward and misleading trick.
Such tricks are adopted from health drinks to selling cars. But the case of financial product is different. Mutual fund products with insurance that use the term child or children have been in the market for quite some time. Hearing from every side, parents assume that child tax, like tax plan or pension product, is also an integral part of personal finance. Unfortunately, child plan is a term related to marketing and has nothing to do with financial matters.
It is also unfortunate that the market regulator SEBI decided the category of the fund, and blessed the misleading idea of Children’s Plan. For the sale of such product, it is emphasized that you invest in it and use the money for the college fees of the child. However, the returns from them are normal. In India, no special tax exemption or other facility is available for financial products made specifically to meet the future needs of children under the existing rules law.
You have to estimate the time and need for investment. After that you can choose such option for investment, which is right for your needs. The child plan part in it is useless. There is also another issue regarding children and money.
This thing which seems less important is very important in the long term. Most of us do not teach children anything about money. Children who have reached adolescence also know very little about earning, saving and investment. They do not know how the money works? What is investment and how to get returns? Why do some things become cheaper and some more expensive over time? They do not have the answers to many such questions. In this case it is also wrong to sit on school. It is not taught in schools. The child learns there too, just like other subjects. It has nothing to do with real life. The best thing you can do for a children’s financial future is to explain to them how money works. This learning or information can be more useful than money.
