Being a father is a tough job. You are constantly worried not only about your child's current situation but also about their future. One of the recurring thoughts is securing your kids' future. No parent wants their kid to have financial issues once they reach adulthood.

Securing your kids' future is a long journey that starts in childhood. And the earlier they start, the better. The sooner the father starts investing; the more financially secure and stable the kid will be once they grow up.

As a dad, you might be wondering; investment is okay. But where do I begin? What are the investment options that I should explore? Well, to help you out, we have discussed eight investments every parent must make to secure their kids' future.

Savings Bank Account

Opening a savings bank account is one of the safest and most flexible ways to start investing for your kids. A savings account will provide low-interest rates compared to other options on the list. They usually offer interest rates between 0.3% - 2% APY. You can compare the various options here. But, they are one of the best ways to develop good money habits for your kids.

Most accounts provide the option of no minimum balance, parental controls, and ATM and debit card facility only after the kid turns thirteen.

Stocks

Investing in the stock market may seem risky. But, its returns can beat the other options mentioned easily. The stock market provides an average of ten percent returns annually. However, the actual returns can be more significant with the right investment.

While investing in stocks, you should aim to invest for the long term. They can help achieve your financial goals as your kid grows. If you are skeptical of investing in stocks, you can always put your money on reliable companies like Google, 

Apple, Disney, or other S&P 500 companies. Alternatively, you can invest in stocks picked by Wallstrank. Financial analysts carefully choose the stocks by analyzing various metrics like the company's earnings report, revenue report and one-year price forecast to give you guaranteed returns on your investment.

Child Insurance Plans

Insurance plans are often overlooked when considering securing your kids' future. They provide a combination of insurance and investment. 

You won't have to worry about your child's future as insurance plans offer an assured sum in case of your untimely demise. Similarly, you also get assured returns on your investment at the time of maturity.

Investing in child insurance plans can cost you as low as twenty dollars per month. Most child insurance plans have a tenure of ten to twenty years. Thus, it is recommended to invest in a child insurance plan as early as possible to gain maximum benefits. 

Mutual Funds

If you are still scared of investing in stocks, you can opt for mutual funds. A mutual fund, too, lets you invest your money in stocks but has a lower risk attached. A fund manager makes the investment on your behalf. 

The money is invested in different sectors and businesses to create a more diversified portfolio. This helps reduce the risks attached to the stock market investment.

The returns on mutual funds are more or less similar to direct stock investments. But, remember that you will have to pay your fund manager a percentage of commission or annual service charges of one to two percent for their services.

Exchange-Traded Funds

Exchange-traded funds (ETF) are similar to mutual funds. They help diversify your investment into stocks, bonds and commodities. But, unlike mutual funds, ETFs can be traded similar to a regular stock can. Similarly, they are traded electronically on the stock market.

ETFs pay handsome dividends, provide excellent passive income sources and give high returns over time. They can, thus, be a good option for saving money for your kids' college tuition fees or other expenses.

529 Plans

529 plans are investment accounts that enable fathers to save for the schooling costs of their kids. They provide tax benefits when the money is withdrawn to pay for college.

Till 2018, these plans only covered the college's qualified educational expenses. But, from 2018 onwards, eligible expenses from K-12 are included as well.

One of the most significant advantages of 529 plans is that your kid has no legal right to the invested money. Therefore, you can be assured that it will be used for the intended purpose.

There are different 529 plans across the country. If you have multiple options, it is recommended to compare them before investing. 

UGMA/UTMA Accounts

As a father, you might also want to save money for the non-educational expenses of your kids. But, in most states, non-adults cannot have investments and financial products under their name. Thus, parents must create a trust to make investments or transfer assets in their name.

Fathers can create a custodial account under the Uniform Gift to Minors Act (UGMA) or Uniform Transfer to Minors Act (UTMA). These enable investments for minors under the care of a custodian (father or mother). The investments can be made in mutual funds and real estate.

Custodial accounts can be set up easily at banks or brokerage firms. Once your kid attains adulthood, the investment in the trust is automatically transferred to your kids' name.

Cash

Parents can take advantage of their annual tax exclusion to give cash to their kids. They can gift $15,000, per parent, per child. Thus, for a family of two kids, parents together can give $30,000 to each child. 

These cash gifts can help save tax and pay for your kids' various milestones, such as buying a car, home down payment or college fees.

Conclusion

As a father, it is your responsibility to start thinking and securing your kids' future. And the earlier you do start working towards it, the better. The investment demonstrates that you are committed to seeing your future generation succeed and be financially stable and independent. 

With the right investment, you empower your kids with the resources and financial stability they need to live a better life.