How Senior Citizens Can Support Grandchildren’s Education Using Savings

Posted on Wednesday, May 29th, 2024 | By IndusInd Bank

Supporting the education of grandchildren is a rewarding endeavor for many senior citizens. Not only does it provide tangible benefits for the younger generation, but it also offers a sense of purpose and fulfillment for the elders. Two practical and secure financial instruments for this purpose are savings accounts and fixed deposits. Here’s how seniors can leverage these tools to support their grandchildren’s education.

Savings Accounts: A Flexible Option

Savings accounts are a cornerstone of personal finance, providing a safe place to store money while earning a modest interest. For senior citizens, there are specific benefits and features that make savings accounts a viable option for supporting educational expenses.

1. Higher Interest Rates: IndusInd Bank offers competitive interest rates on its online savings account. These rates can help grow savings more effectively over time.

2. Regular Contributions: Savings accounts allow for flexible, regular deposits. Grandparents can contribute monthly or quarterly amounts, creating a steady accumulation of funds that can be used for educational expenses like school fees, books, and extracurricular activities.

3. Liquidity: One of the main advantages of IndusInd Bank Online Savings Account is liquidity. Funds can be accessed easily whenever required via the mobile banking app IndusMobile, making it ideal for unforeseen educational expenses or emergencies.

4. Safety: Savings accounts are a secure option, insured by agencies such as the DCGI, providing peace of mind that the money is safe.

To maximize the benefits, senior citizens should look for savings accounts with the best interest rates and minimal fees.
 

Fixed Deposits: Securing the Future

Fixed deposits (FDs) are another excellent option for seniors aiming to support their grandchildren’s education. These are time-bound deposits offering higher interest rates than regular savings accounts, particularly advantageous for long-term educational planning.

1. Higher Returns: IndusInd Bank offers higher interest rates to senior citizens. This can significantly increase the amount available for educational expenses over time.

2. Fixed Tenure Options: Fixed deposits come with various tenure options, from a few months to several years. This allows grandparents to align the maturity of the FD with the educational milestones of their grandchildren, such as starting college.

3. Reinvestment Options: Upon maturity, the principal and the interest earned can be reinvested into a new FD. This compounding effect can substantially increase the savings over a longer period.

4. Safety and Predictability: FDs are low-risk investments, offering guaranteed returns. This makes them a reliable option for seniors who prefer stability over the uncertainties of market-linked investments.

Combining Both for Optimal Support

A balanced approach using both savings accounts and fixed deposits can provide a mix of flexibility and higher returns. Here’s a simple strategy:

1. Short-Term Needs: Use a savings account for short-term and immediate educational expenses. This ensures funds are readily available when needed.

2. Long-Term Goals: Invest in fixed deposits for long-term educational goals such as college tuition. Choose different maturities that align with the educational timeline of the grandchildren.

For example, if a grandchild is 10 years old, a fixed deposit maturing in eight years can coincide with their entry into college, providing a lump sum exactly when it’s needed.

Conclusion

By effectively utilizing IndusInd Bank Online Savings Account and fixed deposits, senior citizens can play a crucial role in securing the educational future of their grandchildren. These financial tools provide a balanced approach, combining the flexibility of savings accounts with the higher returns and stability of fixed deposits. With careful planning and regular contributions, grandparents can make a significant, lasting impact on their grandchildren’s education and future success.

Open an IndusInd Bank Online Savings Account today!

Disclaimer: The information provided in this article is generic in nature and for informational purposes only. It is not a substitute for specific advice in your own 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 taking any financial decisions based on the contents and information.