Monday, January 14, 2019

Savings Strategies That Can Help You Educate Your Child Abroad

Every parent wants to provide for the best possible educational facilities and infrastructure for their children. But, with the increasing educational fees, it is hardly possible to pay the fees for international education. But, it is, in fact, possible if you start preparing for it at the right time. If you are a single mother, you can look for FD for women which is one of the most trusted and secure mediums for saving money. Although there is no such category in fixed deposits specified for women, you can invest in a regular FD from a banking or non-banking financial company (NBFC).

Why Should You Go for A Fixed Deposit?

By opening a fixed deposit account, you can get guaranteed returns on your investment and also be sure that your investment is secure.
The tenor of an FD is flexible. You can choose a tenor ranging from 7 days to 10 years. The senior citizen FD might have some limitations in the tenor.
You can choose the time of interest payout on a monthly, quarterly, or yearly basis. The cumulative FD gives the interest payout altogether along with the principal amount at the time of maturity.
You can also avail loan against FD in case of any financial emergencies. With comparatively lower interest rates, you can use a significant aspect of your FD amount. You can use your FD as collateral in case you need a loan.
Moreover, it is important to note that the interest rates of NBFCs are higher than those offered by the banks. Bajaj Finance, an NBFC offers the highest interest rates compared to other financial providers (8.40 %). The interest in FD for senior citizens on the other hand, is 8.75%. The minimum deposit amount for opening a fixed deposit account with Bajaj Finance is Rs. 25000. 

Smart Saving Strategies for Women 

Fixed deposit schemes give you the power of compounding which gives you a definite interest on your savings by the end of the mandate or by the chosen time of interest payout. 
Here are some smart saving strategies if you wish to educate your child abroad: 

Evaluate Your Child’s Needs

You must have a clear idea of what would be your child’s need to study abroad, like college fee, tuition fee, living costs, food, etc. You can roughly calculate the amount you need and the money you need to deposit. You can also calculate the FD interest rates and returns using the online FD calculator. 

Start Early

Do not wait for the completion of your child’s schooling to start saving for higher education. You must start by saving right from their childhood to get maximum returns. You can also invest in Fixed Deposit (FD) for child along with your own FD for additional benefits.

Do Not Compromise 

By availing multiple FDs with different tenors, you can make sure that you do not have to compromise on your other short-term goals. You can allocate separate amounts of savings for each FD and do not mix up so that you won't be left cashless for any other financial requirements later.

Protect Yourself and Your Loved Ones 

It is recommended that you buy insurance covers for the unfortunate incidents that may occur. By doing so, you can save your savings from being spent on things that can be easily covered by insurance. There is a range of insurance policies to choose from. You can select the one that suits you perfectly.