Ensure Your Child’s Education with a Fixed Deposit

Posted on Thursday, October 24th, 2024 | By IndusInd Bank

Planning for your child’s future is a journey filled with love, hope, and hard work. In addition to these, you also need a touch of solid financial planning. Ensuring a secure future for your child often starts with taking care of their education costs. One effective way to safeguard your child’s educational future is through a fixed deposit.

A fixed deposit for your child’s education offers a secure and structured way to ensure you are prepared when the time comes. 

How Does a Fixed Deposit for Your Child Work?

Investing in a fixed deposit for your child involves depositing a lump sum amount in a bank for a set period at a fixed interest rate. The principal amount is returned at the end of the tenure along with the accumulated interest. 

Here’s how it works:

1. Deposit

You begin by depositing a fixed sum of money into a fixed deposit account. This amount can be as per your financial capacity.

2. Tenure

Choose a fixed deposit tenure that aligns with your child’s educational milestones. IndusInd Bank offers flexible tenure options, ranging from 7 days to 10 years. 

3. Interest Rate

The bank offers a fixed interest rate on your deposit. This rate remains unchanged throughout the tenure. This ensures safe, predictable returns on your investment.

4. Maturity

When your chosen tenure ends, you will receive the principal amount along with the interest accumulated on it. You can make use of these funds for your child’s education.

Let’s look at an illustration for better understanding:

Suppose you deposit ₹ 1,00,000 in the best fixed deposit plan for your child for 10 years. The interest rate is fixed at 7.00%. Here’s how your investment will grow:

– Principal Amount: ₹ 1,00,000

– Tenure: 10 years

– Interest Rate: 7.00%

Here, your maturity amount will be ₹ 2,00,160 (approx.)

Thus, a fixed deposit can almost double your investment over a decade. 

Why is a Fixed Deposit an Ideal Investment for Your Child’s Education?

Here’s why you should opt for a fixed deposit for your child’s education:

1. Guaranteed Returns

One feature that makes FDs so popular is that they offer assured returns. Since you know how much you will receive on maturity, you can plan better for your child’s education expenses.

2. Low Risk

Fixed deposits are not subject to market volatility. This makes them a secure investment choice.

3. Flexible Tenure

You have the flexibility of choosing a tenure that aligns with your financial goals. So, if your child will be beginning their higher education in five years, you can choose a fixed deposit for your child with a tenure of five years. This will ensure that funds are available when they begin their higher education.

4. Compounding Interest

With a fixed deposit, you can harness the power of compounding. The interest is earned on the principal as well as the previously accumulated interest. This leads to substantial growth over time.

5. Easy Management

A fixed deposit requires minimal management and oversight, as compared to market-linked instruments. This makes it a manageable, hassle-free investment option.

Also Read: Comparing Cumulative vs. Non-cumulative Fixed Deposits

Conclusion

Investing in a fixed deposit for your child is an ideal option for parents looking to secure their child’s future. With steady and guaranteed returns, low risk, and the benefit of compounding, fixed deposits offer a reliable way to save for significant educational expenses.

Ready to secure your child’s educational future? IndusInd Bank’s Fixed Deposits should be your choice. Our high Fixed Deposit Interest rates are just the tip of the iceberg. We also offer a 100% instant and online booking process, flexible tenure, options to choose interest credit frequency, and more! 

Book a Fixed Deposit with IndusInd Bank and give your child the financial security they deserve.

Disclaimer: The information provided in this article is generic and for informational purposes only. It is not a substitute for specific advice in your circumstances. Hence, you are advised to consult your financial advisor before making any financial decision. IndusInd Bank Limited (IBL) does not influence the views of the author in any way. IBL and the author shall not be responsible for any direct/indirect loss or liability incurred by the reader for making any financial decisions based on the contents and information.