Solution-Oriented Children’s Fund Online

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₹ 7.53 Lakh Cr ASSETS UNDER MANAGEMENT

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What are
Children’s Mutual Funds?

A children’s mutual fund is a solution-oriented fund which aims to accumulate a corpus for your child’s future. It has a lock-in period of 5 years or till the child attains majority, whichever is earlier.

Advantages of Children’s Mutual Funds

Long-Term Growth

Stay invested in equity mutual funds for a long term and grow your savings as volatility tends to smoothed out in long term.

Diversification

Choose equity securities across different market caps and sectors and invest in a diversified portfolio to enhance the return potential.

Tax Saving

Save tax on investment with Equity Linked Saving Schemes. Claim a deduction of up to Rs.1.5 lakhs under Section 80C.

Wealth Creation

Create optimal funds for your financial goals with the returns offered by Equity Funds and achieve financial independence.

Types of Children’s Mutual Funds

Funds Based On Duration

Overnight FundSecurities mature in a day

Liquid FundMaximum maturity of securities is 91 days

Ultra Short Duration Fund Bonds matures between 3 and 6 months

Money-Market FundInvestment in money market securities with an investment tenure up to 1 year

Short Duration FundMacaulay duration of the fund ranges from 1-3 years

Medium Duration FundMaturity of bonds in between 3-4 years

Medium to Long Duration FundMaturity of bonds ranges from 4-7 years

Dynamic Bond FundPortfolio invests in securities across durations

Funds Based On Market Capitalisation

Corporate Bond FundPortfolio invests primarily in corporate bonds

Credit Risk FundInvestment in securities with the second highest credit rating

Banking and PSU FundDebt instruments issued by banks and PSUs

Gilt FundInvestment in government securities

Children’s funds returns Calculator

Want to know how much your savings will accumulate so that you can plan your child’s corpus effectively?. Use the Aditya Birla Sun Life Mutual Fund (ABSLMF) calculator.

SIP

Invest systematically in regular amounts and build a corpus for your child with a disciplined investing habit.

Lump sum

Invest once with the facility of lump sum investing and save at your will. Time the market correctly and earn good returns.

Calculate SIP Amount
Calculate Portfolio Value

TARGETED EARNINGS

Investment Period (1 to 30 Years)

Expected Returns (8 to 20%)

MONTHLY SIP AMOUNT

Investment Period (1 to 30 Years)

Expected Returns (8 to 20%)

Monthly SIP Amount

₹ 0

Total Amount Invested

₹ 0

Expected Wealth Gain

₹ 0

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Understanding Children’s Funds

Table of Contents

What are Children’s Funds?What are the features of Children’s Funds?What should you know before investing in Children’s Funds?Who should invest in Children’s Funds?What is the tax implication of Children’s Funds?What are the payout options under Children’s Funds?

What are Children’s Funds?

Children’s funds are solution-oriented mutual fund schemes with the objective of creating a fund for your child’s future needs. These funds have a lock-in period of 5 years or till your child becomes an adult.

What are the features of Children’s Funds?

Lock-in of 5 years or till child’s majority, whichever is earlier
SIP or lump sum investment
Asset allocation in equity and debt securities
Long-term wealth creation
Open-ended schemes with professional fund management

What should you know before investing in Children’s Funds?

There’s a lock-in period which restricts liquidity in the initial investment years
You can choose from hybrid or equity-oriented funds based on your risk profile
If you invest in equity-oriented funds, invest with a long-term view to ride out short-term volatility.
Hybrid funds add the stability of debt and lower volatility risks
The returns depend on the underlying assets and benchmark index

Who should invest in Children’s Funds?

Parents looking for a dedicated investment avenue for their child

Investors who have a long-term investment horizon

Parents who want market-linked returns on their investments

What is the tax implication of Children’s Funds?

Equity-oriented funds

• Returns up to Rs.1 lakh are tax-free
• Returns exceeding Rs.1 lakh are taxed at 10%

Debt-oriented funds

• Returns earned are taxed at income tax slab rates

What is the tax implication of Children’s Funds?

Growth option

• Accumulate the returns over the investment tenure for compounding benefit

Dividend option

• Get regular dividends from the returns earned for a regular income

ULIP

Invest and secure with ULIPs

Market-linked returns
Flexibility: withdraw, switch, top up

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LI Retirement Plan

Secure retirement with Life Insurance

Secure regular pensions
Save on taxes

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FAQs On Children’s Funds

Children’s Funds or children's gift funds are investment schemes in mutual funds are designed to provide financial benefits for your children, catering to needs like covering higher educational expenses and marriage expenses. These funds aim for long-term capital appreciation and belong to the category of solution-oriented mutual funds.

Child gift mutual funds encourage individuals to invest funds for long-term growth, providing returns that can significantly benefit their children in the future.
These plans empower children to pursue their aspirations without compromising them due to financial constraints.
Opting for a child mutual fund plan instills discipline, dissuading investors from hasty redemptions and encouraging commitment over a substantial duration.
These plans facilitate the allocation of funds to specific goals, ensuring a well-defined investment portfolio with clear segments for different purposes.

A children's fund allows disciplined investing with its lock-in period and helps you create an earmarked savings corpus for your child’s future needs. Plus, the market-linked returns factor in inflation can give you real returns in the long term. If you choose equity-oriented schemes, you can also earn good returns.

Solution-oriented mutual funds were introduced as a distinct category by SEBI. Two main solution oriented mutual fund categories are children and retirement funds.

No, the lock-in period for these mutual funds is predetermined according to SEBI regulations. Children's mutual funds maintain a fixed lock-in period of 5 years or until the child attains the age of majority, whichever comes first.