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Invest for your Children in Gift Mutual Funds

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Children's Gift Mutual Fund

CHILDREN GIFT MUTUAL FUNDS – WHAT IT IS ALL ABOUT? 

The children’s gift funds are one of the mutual funds schemes that is positioned at funding different life events of children such as marriage and education. Children’s gift funds are classified under balanced or hybrid mutual fundsIf the fund’s debt exposure is more than 60%, it is considered as the ‘hybrid debt-oriented fund’. If the fund’s equity exposure is more than 60%, it is considered as the ‘hybrid equity-oriented fund’.  

WHO IS ELIGIBLE? 

Investment can be made only in the name of ‘minor child’. Legal guardians or parents can invest in these funds.  

KEY POINTS TO BE TAKEN CARE OF 

  • The ObjectiveAlways remember to check the objective of the fund. Look for asset allocation and the investment strategy. Still, if you are ready to take any kind of risk, then prefer investing in debt dominated funds. 
  • Lock-in-PeriodKeep a clear picture of your requirements before choosing a fund. Don’t invest in children’s gift funds if you are looking for short-term investment because these are locked until the child turn 18 years.  
  • Expense Ratio & Exit LoadExpense ratio is charged yearly whilst the exit loads are paid only when fund units are redeemed.  
  • Rate of Return: If you are looking for good returns, you can invest in ‘hybrid equity-oriented funds’. Always remember that high returns come with high-risks.  
  • DocumentationYou must submit official documents which can prove that you are a legal guardian or parent of the child.  

WHAT ARE THE BENEFITS? 

  • Your child’s future is planned in a good manner. 
  • There are no tax-redemptions until redemption. 
  • Monitoring these funds is straightforward and easy. 
  • Investing in these funds instills financial discipline over a long span period. 
  • Taxes payable are minimized at redemption due to the benefit of indexation. 
  • It helps in allotting different funds for desired goals. Therefore, your investment portfolio will be clear enough for you to decide the investment amount for specific purposes.  
  • You can enjoy tailor-made or customized fund schemes when you want to take this fund. 

TOP CHILDREN’S GIFT MUTUAL FUNDS 

Fund Name 
 
ICICI Prudential Child Care 
HDFC Children’s Gift Fund 
TATA Young Citizens Fund 
Franklin’s Children’s Asset Plan (CAP) 
UTI Children’s Career Plan (CCP) 
AXIS Children’s Gift Fund  

Source: bankbazaar.com 

TAKEAWAY 

Every parent care for the future of their children. The worth of securing is by investing in suitable instruments. Make sure the future is well-off. How about checking out the funds on Gulaq (originally spelled as gullak)?   

 

*Mutual fund investments are subject to market risks. Please read the scheme information and other related documents carefully before investing.

Rating: 4.9/5. From 11 votes.
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