There are various types of education savings plans that you can consider as an NRI for the future welfare of your children and their financial security. However, it is important to have a proper strategy while planning for these significant future expenses. This is where comparing the best education savings plans is important. Let us look at some key aspects worth noting in this regard.
Understanding Education Savings Plans
There are several options available in case you’re looking for specific education savings plans for college education of your children or education savings plans for higher studies. These are financial instruments designed to enable parents to create a sizable corpus to meet the increasing costs of the education of their children in the future, while surpassing inflation simultaneously. There are several plans that combine investments across various kinds of funds, along with insurance coverage and financial security for children. You have to save in a disciplined way through regular contributions in most cases, while the future premiums are often waived in case of the unfortunate demise of the parents during the tenure of the policy.
In most cases, you can flexibly choose investment funds across multiple categories and also the premium payment frequencies, along with the payout choices. Beginning early helps you benefit from the sheer power of compounding.
Types of Education Savings Plans
There are various types of child education savings plans available that you can consider. These include international education savings plans that are USD-denominated and come with life coverage and other benefits.
You can find specialised NRI education savings plans in India’s GIFT City from HDFC Life International. Some other options include child ULIPs, which combine insurance and market-linked investments, traditional endowment or guaranteed return plans, single/regular premium child plans, and so on.
Best Education Savings Plans for NRIs
Wondering how to choose an education savings plan to automate college savings? You can choose US Dollar Education Plans from HDFC Life International. These are USD-denominated plans, giving you robust returns in a in a globally recognized currency and helping hedge against future inflation and currency fluctuation risks. At the same time, you also get sizable life coverage throughout the policy/investment tenure. The plan continues with premium waivers in case of the policyholder’s death, while you can save in US dollars and build wealth for the long haul, with flexible withdrawals and zero allocation charges.
To ensure comprehensive protection, you can back it up with an Insignia Global Health Plan from HDFC Life International, which includes a Maternity module. While distinct from education savings, this is a good place to start if you’re looking to have a child or are about to start your family soon. There is a waiting period for maternity benefits, i.e. a duration after which you can be eligible to receive the coverage for medical procedures and add-ons related to childbirth. Hence, you should review the brochure carefully for specific waiting period details and start accordingly. Thereafter, you can start investing early in US dollar education plans to give your child a good education.
Education Savings Account vs Investment Plan
Here are some key points worth noting on the education savings account vs investment plan debate.
- Education savings accounts are specially tailored for particular education expenditure, including college, 10+2, postgraduate education, and so on. General investment plans are broader and can be used to meet varying financial goals.
- Education savings accounts are usually restricted to particular options within the plan (funds and so on), while general investment plans are broader (stocks, mutual funds, bonds, ETFs, and more).
- Education savings accounts often have annual limits, which is not the case for general investment plans.
- Funds in traditional education savings accounts are typically restricted to the education of the beneficiary, while funds in general investment plans (and flexible insurance-based education plans) can often be used for other purposes (if necessary).
How HDFC Life International Helps
HDFC Life International offers US dollar-denominated plans designed to support NRIs in planning and saving for their child’s higher education abroad. These solutions enable to build wealth in a globally recognised currency while helping diversify against potential inflation risks over the long term.
In addition to investment benefits, these plans can also provide substantial life coverage along with premium waiver benefits, helping ensure continuity of the financial plan. Furthermore, HDFC Life International offers global health plans with maternity benefits, which may serve as a suitable starting point for individuals or families planning to welcome a child in the near future.
