In the current economic climate, where education inflation in India hovers around 12%, planning for a child's future has never been more critical. Neha Nagar, a renowned financial expert and digital content creator, introduces the concept of a 3-in-1 child account as a comprehensive solution for parents seeking to secure their child's future. This account combines banking, demat, and trading facilities, offering a streamlined approach to saving and investing for your child's education and other significant life events.
Building a Financial Foundation for Your Child
Understanding the 3-in-1 Child Account:
Neha explains that a 3-in-1 child account is an integrated solution encompassing a bank account, demat account, and trading account, all in the child's name. This arrangement simplifies the process of managing your child's financial assets and investments.
Strategic Monthly Savings:
She suggests that both parents can contribute a total of Rs. 13,000 monthly (Rs. 6,500 each) towards the child's future. This structured saving plan ensures a disciplined approach to building a substantial corpus over time.
Investing in NIFTY 50 ETFs:
Neha recommends investing the accumulated savings in NIFTY 50 through Nifty ETFs, citing popular options like NIFTY BeES, Nifty 50 ETF, and NIFTY ETF. This investment strategy leverages the growth potential of India's equity market.
Calculating the Long-Term Returns:
With an annual investment of Rs. 1.56 lakhs, the total investment over 18 years would amount to Rs. 28 lakhs. Neha projects that, given the historical average returns of 12% for NIFTY50, the child could have a fund of approximately Rs. 1 crore by the age of 18.
Increasing Investments Annually:
To further enhance the investment outcome, Neha advises increasing the investment amount by 10% annually. This incremental approach can significantly boost the final corpus, potentially providing more than Rs. 1 crore for the child's higher education, travel, or marriage expenses.
Neha Nagar's insightful guide to using a 3-in-1 child account for financial planning underscores the importance of early and strategic investments in securing a child's future. Her approach offers parents a practical and effective way to address the challenges of rising education costs, ensuring that their children can independently handle significant expenses as they come of age.
