Best 5 Funds to invest in 2020 – Children’s Gift Mutual Funds
While preparing for a Financial Planning, setting a Goal is essential for any investments. The Financial goal may be Short, Mid term or Long term. However it should be planned with a Goal Name like Retirement Planning, Child Education, Marriage, Buying a Home or Emergency Fund.
Nowadays we cannot predict the value of Education and Medical Expenditure. This is why when it comes to getting Health Insurance for the Family to cover medical expenses and it benefits everyone in the family.
When it comes to Child Education, most of us fail to plan it properly. We need to plan ahead to cover the cost of Children’s Higher Education. When planning for the upbringing of children, we must keep in mind that it is a long term goal.
For example, if the age of child is about One year, then we have a period of 16 years to achieve the Goal like Higher Education. So with that in mind, it is better to have a returns that goes beyond inflation.
Even if we say Bank Deposits and Postal Savings schemes are a safe investment, we cannot able to generate returns more than inflation. With regard to the cost of Education, the inflation goes up every year. So, one can plan accordingly with Mutual Funds.
One can invest in Equity oriented Mutual Funds when the goal period is more than 5 years. Retirement people can choose Debt Funds and Hybrid Funds based on their Risk Profiling. It is important to start investing early for the Child Education.
Here are the Top and Best Children’s Gift Funds to invest in 2020:
- HDFC Children’s Gift Fund
- ICICI Prudential Child Care Fund
- UTI Children’s Career Fund (CCF)
- Axis Children’s Gift Fund
- Aditya Birla Sun Life Bal Bhavisya Yojna
What is a Children’s Gift Funds in Mutual Funds ?
The above Schemes are specific for Children’s Education provided by the Mutual Funds. Children’s Gift Mutual Funds is a Hybrid Fund. Investing both in equity and debt oriented categories.
In such schemes, the contribution of Equity investment is usually between 60 – 70 Percent. The remaining will be invested in Debt Securities. Children’s Gift Funds have a minimum lock-in period of 5 Years. However once the child attains the majority, there is an option to exit – So, whichever is earlier.
The said lock-in period is short as compared with Sukanya Samriddhi Account – Postal Savings schemes, where the lock-in period is about 21 years. There is an exit load in few schemes, where if exits before 5 years. Such a facility will make regular investments on Goals and make a Discipline on Investing.
What are the Features in Children’s Gift Mutual Funds ?
Generally, the Children’s Gift Fund will be invested in the name of minor child. The investor can be a Donor, Guardian or Parent. Third party can invest in these funds on behalf of Child, like Grand Parents, Uncle, Friends and other Relatives.
The Minimum investment is said to be Rs. 500/- as SIP Investing. However it is advisable to prepare a Financial Planning for Child Education and calculate the amount required in Future. Then invest it accordingly. We can also use this Funds for Marriage Plan or any Profession on behalf of Child.
Those who have difficulty in selecting other funds for their Child, can choose these Children’s Gift Mutual Funds to benefit of their children. In addition, one can generate better returns in a long run and there is also the Joy of Parenting.
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