5 Best Child Investment Plans to Invest in 2024

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There is a joy of being parents but at the same time, there comes the responsibility of protecting your kid’s future against an unexpected life event. Because life is uncertain and you cannot predict what the future holds for you. That’s why it is quite imperative to be well-prepared in advance by investing in the best child plans so that your kids have enough financial assistance for all the major milestones of their life. 

Well, every parent would want to make their children’s future turn out to perfect fun no matter what. Well, this is what the primary duty of a parent should be. Thus, you do not only have to consider protecting your future but also the child’s future as their guardians. It is your biggest responsibility to invest smartly and wisely in order to ensure that your kids avail the best possible facilities in return will shape up their careers in the right manner. 

It’s true that the right education is very important for your child’s safe future because it is the platform through which they can become financially independent and successful person in their life. However, the steep rise in the education cost and an alarming rate of inflation can even affect the most financially secure parents. That is why it is important to make the right investment choices as early in life as it is possible.

Fortunately, there are various child investment in Dubai that can provide you considerable returns in the long run.  Here are some of the best child plans that parents can avail in order to secure their child’s future financially:

1. Debt Mutual Funds

For long-term goals such as a child’s education, investing through a Systemic Investment Plan in equity mutual funds can be considered for a long tenure period. The longer time-frame usually ranges from 5 to 15 years. Well, mutual funds are one of the most famous investment plans in UAE as they provide better returns when compared to bank deposits.

However, you need to choose safe child investment plans more than anything else. Go for it if you are planning a very long-term investment because they offer better returns in the long term. Henceforth, for long-term goals such as a child’s education or marriage, investing in equity mutual funds through SIP is one of the ways to create a corpus for your child’s future.

2. Debt Funds

Debt funds come with comparatively low risk in comparison to equity mutual funds. Basically, debt funds are invested into several bonds and deposits and then earn interest by lending the funds and earning interest rate which is the actual source of returns. Investing in debt funds is highly advisable for a child’s recurring expenses such as school tuition fees since it comes with easy liquidity.

Investing in the short-term debt funds are way more flexible and enable you to withdraw or invest whenever is needed, and it usually offers a maximum of 5-7% returns on an annual basis.

3. Term Life Insurance Plan

A term insurance plan is a part of a life insurance policy that is also known as a pure protection plan. This plan is a life cover that prevents the family member or a child from facing financial problems in case the premature death of the sole breadwinner of the family. Under this plan, the insurance company offers the sum assured as a death benefit to the nominee if the policyholders die during the tenure of the policy. The best thing about this life insurance policy is that it offers comprehensive coverage at an affordable premium. Thus, you can opt for a term plan to protect your child’s future financially even in your absence.

Well, most of the financial experts suggest that while opting for a term plan, it is better to have coverage that will include all major expenditures such as livelihood, education, and child’s marriage easily.

4. Gold Savings

Gold is also considered one of the best long-term investment plans in UAE, especially for your kids. But instead of buying physical gold which comes with additional expenses and of course, a great risk, you should consider investing in SGB (Sovereign Gold Bond) or Gold ETFs (i.e. Exchange Traded Funds). These both are gold’s electronic variants.

5. Child Life Insurance

Child life insurance is an investment cum insurance plan that enables you to build a corpus for your kid while also providing you the life coverage. In short, it enables the policyholder to safeguard their children’s future at the right age in addition to building an investment corpus so as to meet significant milestones in a child’s life. In these types of life insurance plans, the parent is the insured while the child is a beneficiary who gets the sum assured upon the death of the policyholder during the tenure of the policy.   However, if the insured survives the policy term, he/she receives the lump sum amount as a maturity benefit.

Summing it up

There is no shortage of investment plans in UAE that you can consider to build a corpus for your child’s safe future. All you need to choose the investment plan that suits your child’s future financial needs the most. Also, do not forget to consider some important factors such as your age, investment tenure, available capital, risk appetite, child’s current age, and his/her ambition as well. Considering all these factors while opting for best child plans will help you to make the right decision for the child’s future.

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