Skip to main content

Have you saved enough for your child’s future financial needs?

Mutual Funds Plan for children is the answer to secure your kid’s financial future

Every parent aspires to offer the best to their children – sound education, a decent lifestyle and most importantly, adequate financial security for them to pursue their dreams. But in order to fulfil these desires, it is necessary that planning and regular investments are done early on. And what better than Mutual Funds to achieve these objectives?

What are Mutual Funds Plans for children?

Mutual Funds Plans for children are the mutual fund schemes specially designed keeping in the mind the long term financial needs of a child.

How do Mutual Funds Plans for children Work?

  • They invest proportionately in both equity and debt instruments to maintain a balance between growth and regular income, depending on the scheme. These are mostly hybrid funds that seeks to generate income by investing in debt, money market instruments and equity and equity related securities.
  • They are ideal for investors who have a long-term investment horizon. With the returns being inflation adjusted in the long run, the funds are able to beat the soaring higher education costs and other expenses and deliver effectively on their objective.
  • Such schemes usually invest up to 75% of their corpus in fixed income securities, money market instruments, securitized debt and cash, with G-Sec and corporate securities comprising a major part of the debt component. The balance of up to 25% is invested in equity which seeks to provide potential capital appreciation.
  • Since investing for child's future is considered a long-term investment, most of these schemes come with a high exit load to discourage early redemption.
  • SIPs or Systematic Investment Plans are the ideal way to go about investments in Child Plan Mutual Funds since a small amount overtime can accumulate into greater returns.

Comments

Post a Comment

Popular posts from this blog

What are hybrid mutual funds and how are they taxed?

What are hybrid mutual funds and how are they taxed? Every investor is different. There are some who like taking risks and enjoy the potential of high returns. On the other hand, there are some who are very conservative in terms of taking risks. They don’t mind the low returns as long as they are assured of capital security. Then there are those who are in the middle of the risk spectrum. They are not too aggressive neither too conservative. They look for moderate risks with moderate returns. To suit the investment preference of these different types of investors, mutual funds come in different variants. One such variant is the hybrid mutual fund which is suitable for moderate investors who lie in the middle of the risk spectrum. Let’s understand the concept of hybrid mutual funds and their tax implications – What are hybrid mutual funds? Hybrid funds are mutual funds which invest in both equity as well as debt instruments. The return potential of equity investment is adde...
Post a Comment
Read more

Basic of Mutual Fund......

MUTUAL FUND A mutual fund is a professionally managed  investment fund  that pools money from many investors to purchase  securities . A mutual fund is formed when capital collected from different investors is invested in company shares, stocks or bonds. Shared by thousands of investors (including you), a mutual fund is managed collectively to earn the highest possible returns. The person driving this investment vehicle is a professional fund manager. Mutual funds have become a very popular avenue for investment for many investors because of the benefits that they have. They allow investors market-linked returns, diversified risks through asset allocation, affordability through SIPs and ease of liquidity. Given these benefits and the potential of attractive returns, investors choose to invest their disposable savings in mutual funds. Mutual funds come in many different variants and when it comes to choosing the best fund, investors are often confuse...
Post a Comment
Read more

Is Children’s ULIP Suitable for You?.............

Is Children’s ULIP Suitable for You? As a parent, you must have paid a sizeable sum of money as donation for your kid’s admission in school. Besides this, you also have to regularly pay a certain sum of money for your child’s fees, and additionally, you have to save for his/her higher education too. However, with rising costs of education, it is quite likely that inflation has been eating into your savings. For example, today, the cost of an engineering course in India is Rs. 8,00,000. After 10 years, it could cost approximately Rs. 33,00,000, assuming inflation at the rate of 10% every year. This is a modest estimate considering how according to a recent survey, the cost of education is increasing at 15-20% on a yearly basis. To combat inflation and save effectively for your children’s education, term insurance, along with disciplined investments in mutual funds, are important tools. There are also a few children’s Unit-Linked Insurance Plans (ULIPs) that are being offered by i...
Post a Comment
Read more