Build Wealth Through Monthly Investments; There are 2 Plans

Investing in children is an essential financial responsibility amid rising costs. Long-term investments that can be started at an early age help build wealth for future spending. Investing early is essential to building a fund for a child’s college education.

Only by choosing an investment that takes into account growing inflation rates can you accumulate enough wealth to cover your future expenses. He might consider 2 investments from the Debt and Equity array. Long term investment in Sukanya Samriddhi Yojana and Equity Linked Savings Program will help build better wealth. Let’s look at these in detail.

1) Equity Linked Savings Plan

The Equity Linked Savings Program is a tax-exempt mutual fund under Section 80C of the Income Tax Act. Must invest at least 3 years. 500 per month can be invested through SIP. Depending on the financial goals, one can choose between two types of investments, a dividend distribution or a growth fund. Long term capital gains up to Rs 1 lakh are tax free.

Equity Linked Savings Program returns will depend on the stock’s performance. The investment has no fixed term with a lock-in period of 3 years. The Equity Linked Savings Program can be invested according to the investor’s goals.

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2) Sukanya Samriddhi Yojana

Sukanya Samriddhi Yojana is a savings plan specially designed for girls, a long term investment to create wealth for education and marriage. Any girl under 10 years old can open an account. The account matures only after 21 years of account opening.

The minimum amount that can be deposited in a year is Rs 250. Up to Rs 1.5 lakh can be invested annually. This total amount is tax-free under Section 80C. It is possible to partially withdraw up to 50% of the investment when the girl turns 18 years old.

Read More About…. Sukanya Samriddhi Yojana

Things to pay attention to

Sukanya Samriddhi Yojana is a 21 year long term investment with a tax deduction of Rs 1.50 lakh under Section 80C of Income Tax Act for both investments. For example, if a Sukanya Samriddhi Yojana account is opened in the name of a 9 year old girl, the term is 30 years. This money cannot be used for educational purposes. If started when the child is 1 year old, the investment can be withdrawn at 22 years old.

Equity-linked savings plans offer higher returns than Sukanya Samriddhi Yojana. Looking at past returns, equity-linked savings plans offer 15% annual returns. The interest rate of Sukanya Samriddhi Yojana is fixed by the central government from time to time. Currently, Sukanya Samriddhi Yojana’s interest rate is 8%. Long term capital gains up to Rs 1 lakh are tax free. Above Rs 1 lakh, tax is payable at 10%. Income under Sukanya Samriddhi Yojana is not subject to additional tax.

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