Children’s day is round the corner and it is the right time to start thinking about our children’s future. November 14, the birthday of our first Prime Minister Jawaharlal Nehru is celebrated as children’s day as he always loved children and took measures for their growth and development.
Children play completely different and the most important role in our lives. For some, they act as an emotional support system; they are the most precious gifts anyone can have. All of us want our kids to do something different, better and beautiful. But what is our responsibility as a parent?
It’s we who play a major role in shaping our kid’s life. So how we support them at each and every phase of life both emotionally and financially is very important supporting your kid financially even before they are born is something that is in your hands. There are a lot of children’s gift plans available in the industry.
What is children’s gift plan?
Children’s gift plan is a mutual fund type. It is a hybrid mutual fund (solution oriented).The objective of these funds is to generate wealth for kid’s future goals like education, higher studies, marriage, etc. These funds are best suited for long term investors.
Features of children’s gift fund:
- These funds are long term investment plans.
- They can have a lock- in period of 5 years or till the kid turns 18 years
- No tax benefit is given.
- As the intention is to achieve long term goals like education or marriage and discourage early withdrawals, these funds have higher exit load as compared to other mutual funds.
- The exit load may range from 3 to 4%
- Grandparents can also investin the name of their grandchildren.
- At the time of redemption, money is sent to the beneficiary’s account only. (kid’s account)