Mutual Fund for Children - Invest in Child Plan Mutual Fund

Every parent wants to provide the best to his child in life. Be it upbringing or education, parents strive to offer the best they can. As a parent looking to helping your child start on a solid footing, investing in mutual funds can be an ideal choice.Through disciplined and regular investments, you can build a sizeable corpus by the time your child turns a major to meet his/her varied requirements. This in fact, can be one the best gift you can give to your child.

From the time a child is born, until the time he/she goes for higher education, there are a range of needs. These needs, particularly for higher education, can be fulfilled by investing in mutual funds. As a parent, you can either invest in a standalone mutual fund in your name or in the name of your minor child.If you are investing in mutual fund for child , who is a minor, he/she will be the sole holder in that folio. No joint holder is allowed. Also, while making such an investment, you need to provide the child’s birth and age proof that evidence with the date of birth and the relationship with the guardian.You can set up a systematic investment plan (SIP) to invest a pre-defined amount every month in the chosen fund.However, note that the instruction for SIP will be valid only till the time your minor child turns into a major. If you are investing in a standalone fund in your name, you can make your minor child a nominee. However, note that in such a scenario, the appointed legal guardian would exercise control till your child turns into a major.

You can invest in different mutual funds to fulfill diverse needs of your child. For example, you can opt for an equity mutual fund for child to build a corpus for higher education. At the same time, for needs like vacation or admission each year, you can opt for liquid funds. Irrespective of the fund you choose, make sure to remain invested unless the goal is achieved. Also, in case equity funds as you near the goal, you can set up a systematic withdrawal plan (SWP) where units are redeemed, and the money is invested in debt products to prevent erosion of the corpus due to volatility.

As evident, investing in mutual funds can help you fulfill all dreams of your child with utmost ease. Start early to harness the power of compounding in the long run.

The information contained herein is generic in nature and is meant for educational purposes only. Nothing here is to be construed as an investment or financial or taxation advice nor to be considered as an invitation or solicitation or advertisement for any financial product. Readers are advised to exercise discretion and should seek independent professional advice prior to making any investment decision in relation to any financial product. Aditya Birla Capital Group is not liable for any decision arising out of the use of this information.