Ans: Considering the investment horizon of a long term (minimum 5 years) for your child’s higher education, it is advised that you invest in large cap equity funds. Axis Bluechip Fund, Parag Parikh Long Term Equity Fund are a few of the given category that you may consider investing in.
Accordingly, what is the best way to invest money for a child?
Fortunately, savvy parents can invest in their child’s future through a custodial IRA. Custodial IRAs come in two flavors: traditional and Roth IRA. The options almost mirror one another, allowing you and your child to put money in an investment account composed of stocks, bonds, and other securities.
Herein, is there something better than a 529?
Custodial UGMA and UTMA accounts can be used for purposes other than education. Roth IRAs have tax advantages similar to 529 plans and they don’t count as assets for financial aid purposes.
How do I put my child up for financial success?
Here’s how we are approaching money with respect to our children and their own financial futures.
- Open a bank account now.
- See a financial advisor about college.
- Put away a little every month.
- Think about an allowance/savings system for your kids.
- Create opportunity for work, even at a young age.
- Teach them about money.
Which policy is best for child?
10 Best Child Insurance Policies
- LIC Jeevan Ankur.
- HDFC Life YoungStar Udaan.
- Reliance Nippon Life Child Plan.
- Aviva Young Scholar Advantage.
- Birla Sun Life Insurance Child Plans.
- SBI Life – Smart Champ Insurance Plan.
- Exide Life Mera Aashirvad.
- Future Generali Assured Education Plan.
What are the disadvantages of a 529 college savings plan?
Here are five potential disadvantages of 529 plans that might affect your savings choice.
- There are significant upfront costs. …
- Your child’s need-based aid could be reduced. …
- There are penalties for noneducational withdrawals. …
- There are also penalties for ill-timed withdrawals. …
- You have less say over your investments.
What happens to 529 if child does not go to college?
If assets in a 529 are used for something other than qualified education expenses, you’ll have to pay both federal income taxes and a 10 percent penalty on the earnings. (An interesting side note is that if the beneficiary gets a full scholarship to college, the penalty for taking the cash is waived.)
Can you lose money in a 529 plan?
False. You don’t lose unused money in a 529 plan. The money can still be used for post-secondary education, for another beneficiary who is a qualified family member such as younger siblings, nieces, nephews, or grandchildren, or even for yourself.