Category Archives: Mutual Fund

The mutual fund industry has seen immense growth in recent years. According to numerous statistics, there has been a 5 ½ fold increase in the last ten years. This is simply because seasoned investors have realized the potential of mutual funds and have now started investing in them through SIP or Systematic Investment Plans. The vast universe of mutual funds often seems daunting to new investors because of the large investment horizon and involved risk profile. As such an investor needs to know whether he is investing in the right mutual fund or not and whether the investments can meet his set targets and achieve desired goals. There are normally two ways to go assuming you are interested in investing in the best mutual funds. The first is by yourself and the second is through a financial advisor.  An all-important question at such times is whether an investor has the required know-how to conduct a proper mutual fund analysis and determine whether he is on the right path.  For that, you can take the help of a reputed financial advisor or financial expert. This service is available on the EduFund app where both new and seasoned investors can opt for the services of the SEBI registered investment advisors and experts in investment management for investing in the right fund. The app also helps to stay updated on the mutual fund investment market. Start Investing in Mutual Funds Parameters that help to analyze whether you are investing in the right mutual fund 1. Expense ratio The expense ratio is charged annually by the mutual fund for managing the investor’s money as a percentage of total assets. The expense ratio at the end of the day will reduce the available returns hence the investor must look for mutual funds that have a low expense ratio. Minimize the expense ratio by opting for direct mutual funds as it does not charge broker commission or intermediary fees. Also, compare the expense ratios of preferred mutual funds as it will help to decide whether the investment is the right one or not.  Download App and Start Investing 2. Performance of mutual fund against a set benchmark Each mutual fund scheme has a set benchmark that it tries to outperform. The investor must check for the benchmark to understand the percentage return that is considered a good performance. Compare both benchmark and actual performance to identify whether you have been investing in the right mutual fund. If a mutual fund consistently generates more returns and outperforms the benchmark index then the investor can know that he is doing right by his investment portfolio. SIP Plans for Child Education Read More 3. Level of risk Mutual funds are subject to risk and checking the level of the risk factor for every scheme is as important as checking for the expected returns. The risk is often defined in terms like low, high, moderate, moderately high, and moderately low.  Generally, the schemes disclose the level of risk to make the investor aware of the involved risk factor. Investors must ensure that the higher the risk higher is the return on the investment commensurate with the risk. https://www.youtube.com/watch?v=uYlrsx9_yog 4. Fund’s history Look at the fund’s history to know whether you are investing in the right mutual fund. Knowing about the long-term previous performance of mutual funds is the right step in determining whether the fund has generated good returns over the last few years.  If the fund has seen one or two down cycles over the last five years and has regrouped once again to give solid returns then investors must believe that their investment is at par. Calculate Returns Generated 5. Portfolio turnover ratio The higher the Portfolio Turnover Ratio, the higher the buying and selling of the assets. This leads to higher transaction charges or brokerage fees. The portfolio turnover ratio helps to minimize the net returns from the investment. Investors must calculate the net return and compare funds so that they can know whether their investments are on the right path. 6. Fund manager The mutual fund manager can help in carrying out the necessary due diligence that will boost the chance of better gains. The investor must look at the performance history of the manager to know about his experience in handling mutual fund schemes.  A good reputation of the fund manager increases the investor’s confidence in the related schemes and helps him to know he is investing in the right funds. Conclusion An investor can determine whether he is investing in the right mutual fund if he can achieve higher returns at comparatively less risk. Selecting the right fund might seem a daunting task at the onset but a little research and understanding go a long way in finding the best mutual fund investments. FAQs How do I know which mutual fund is best for me? To determine the best mutual fund for you, consider your investment goals, risk tolerance, investment horizon, and financial situation. Research fund performance, categories, and managers' expertise. Consulting a financial advisor can provide personalized guidance based on your needs and preferences. What type of mutual fund should I invest in? The type of mutual fund you should invest in depends on your goals and risk tolerance. Equity funds offer growth potential but involve higher risk, while debt funds focus on stability. Hybrid funds combine both. Consider your needs and consult a financial advisor for personalized advice. How do you know whether you should invest in a mutual fund? Evaluate your financial goals, risk tolerance, and investment horizon. Research the fund's performance, expenses, and manager's expertise.

Both life and wallet will never be the same once you decide to have a baby. No event in your life will signify financial change quite the way this one does, from the first prenatal appointment to the day of college graduation (and beyond). 5 financial things to consider before child planning 1. Create a budget Before you start child planning, you need to have a budget in place. You and your partner may need to create a realistic budget based on your expenses and your streams of income. Once you know how much you can afford to spend, you will be able to tackle the costs easily. A new child is a new family member that needs space! So if you need extra space once the baby is born, figure out what kind of home you can afford, whether it's a slightly larger apartment, a warm cottage, or a pricey house. Will you want the latest baby things or your sister’s passed-on ones? Think about what sort of child care would you require and get candid with your expenses before you start making any purchases. Money Management Tips for Homemakers Read More 2. Costs associated with birth As new parents, you need prenatal vitamins, alternative therapies, labor and delivery alternatives, and screening tests. Give yourself enough time to change or upgrade insurance plans should you need more comprehensive coverage. Good health insurance is vital in this economy. Hospital bills, medical fees, and maternity costs can be high. According to estimates from the industry, a straightforward delivery could cost between Rs 50,000 and Rs 70,000, but a private specialty hospital could charge up to Rs 2-3 lakh. A cesarean delivery could result in a cost rise of up to Rs 4-5 lakh. Before having a kid, you should make financial arrangements for the costs associated with the delivery and child care. 3. Consider maternity leave The vast majority of Indian employees are not entitled to paid family leave. If the mother is employed, you might need to think about taking a lengthier (unpaid) maternity leave or a sabbatical for a year or two. This can be a huge financial loss for families that rely on both streams of income. Paid parental leave is not always an option. Find out if your workplace offers paid leave for new parents and if there are any policies in your favor that you can utilize. Determine the number of weeks covered and the proportion of your salary that is used. Do you have to use your sick and vacation days first? If you don't have access to paid time off or you're going to take more unpaid time off, you might want to cut costs or rely on your savings. 4. Purchase life and health insurance You'll want your child to be stable financially if something were to happen to you or your partner. A life insurance policy can assist in paying for things like child care, housekeeping, cooking, and more. Purchasing maternity insurance is the first action you can take to cover maternity costs. When purchasing health insurance, (even for a couple), it is important to confirm that the policy includes coverage for maternity costs and, if applicable, any applicable waiting periods. Additionally, by paying a larger rate, you might add pregnancy coverage to a current insurance policy. Buying health insurance is most important when considering having a child. Get your health covered in your plan so that you are not financially burdened in case of a health emergency. 5. Plan for the child’s education Just like the prices of lemons and oranges are growing, the cost of education is skyrocketing. Saving for your child’s college is a necessity. When it comes to saving money for college, time and compound interest are your best friends. Even while inflation is an unavoidable fact, keep in mind that education inflation is far higher. Utilizing the force of compounding is one approach to combat this, but it will only be effective if you have a long-term strategy in place. You indeed have no idea what career path your child will take, but you still need to put aside a portion of capital that can be utilized when the time comes. Right now, you need to think about the type of education you would like to offer because the practical costs of studying engineering in India vs. the US would be very different. From giving birth to seeing them off to college, watching your child grow and thrive is every parent’s dream! So give those dreams wings by planning ahead and investing for their bright future!  TALK TO AN EXPERT

How much I need to save to send my child to Harvard University is one of the top queries of a parent who wants to send his child abroad. Harvard is considered one of the best universities in the world, offering varied graduate and undergraduate programs like business administration, business management, bioengineering, law, economics, arts and science, sociology, etc.  Students dream of studying at this university but only a few with academic excellence are given the chance to step onto the campus to study and fulfill their heart’s desire.  Imagine if your child is one of the selected few who have managed to gain entrance to this top university. But what happens if they are unable to enroll just because they do not have the required funds?  At such times the first thought that crosses the mind of a parent is that it is necessary to plan and save to send my child to Harvard University from an early age. Start Investing in Mutual Funds Steps required to plan and save for sending a child to Harvard University How much I need to save to send my child to Harvard University is a question that can be answered by following the subsequent steps: Know about the current cost of education at Harvard University When your child starts showing an affinity for a specific course it is the right time to start planning and saving for his further studies. Be aware of the cost of studying at Harvard University, for example, on average the fee structure of most of the 3-year and four-year academic courses varies between $50,000 - $70,000 (Rs. 40 to 55 lakhs). Factor in the expected expenses  Tuition Fees:  Identify the tuition fees and the other mandatory fees  Room and board: Most of the students prefer to live on campus as it is less expensive compared to outside accommodations. It also offers easy access to meals, classes, and extracurricular activities which is a blessing for students who have traveled from different parts of the world to this esteemed university Transportation costs: If the student is living out of campus then the transportation cost should also be added to the total cost Food expenses: Factor in the food expense for both on-campus and off-campus scenarios Education inflation: You need to add the inflation rate (minimum 7%) to the total cost. You don’t need to guess - you can calculate this cost by using the College Cost Calculator for Free!  Calculate Cost of studying in College Calculate the average costs Calculate the average costs of studying at Harvard and identify how much money you need to save to send (\your child to Harvard University.  Go through all the expected costs and identify an average amount that you need to shelve out for instance 60,000 dollars (Rs. 47 to 48 lakhs). Now calculate how much time you have before sending your child abroad. Get a rough estimate about the amount you need to save every year, for instance, 60,000 dollars/8 years which amounts to 7500 dollars per year (Rs. 5- 6 lakhs) Effect of compounding Make the most of the compounding as it will reduce the principal amount to a great extent and magnify your returns. If a parent wants to save 60,000+ dollars, she will have to shelve only an average of an estimated 5,500 dollars instead of 7,500 dollars @ 5% interest per annum for eight years. Research the best available saving option that will help to save with better interest rates. Or you can talk to an expert to understand how much I need to save to send my child to Harvard University. It is a step in the right direction as it helps parents to plan and save effectively within their budget with the help of India’s first college cost calculator and with a curated plan to achieve that target.  Plan and start investing Parents who start planning for their child’s future from the very beginning have an additional advantage over parents who realize the importance of saving at a later stage. If you are one of the late investors do not panic, you can still make some well-advised investments that can help you make up for the lost time and get the required help in the planning and saving process for the child’s brighter future at Harvard University. Start Investing in US Market FAQs How much does it cost to send your kid to Harvard? The total annual cost to attend Harvard University, including tuition, fees, room, and board, was approximately $76,000. How much do you need to donate to get into Harvard? Donations to Harvard University, while they can have an impact on the institution, are not a direct means of securing admission. Harvard, like other reputable universities, has a competitive admissions process based on academic excellence, personal achievements, and other factors. Admission cannot be guaranteed solely through donations. Is Harvard expensive for Indian students? Yes, Harvard University's tuition and living expenses can be relatively expensive for Indian students due to currency exchange rates and the overall cost of living in the United States. However, Harvard does offer financial aid and scholarships to international students, which can significantly offset the costs for those who qualify. How do I raise my child to go to Harvard? Raising a child with a strong foundation for potential admission to Harvard involves fostering a love of learning, encouraging curiosity, developing leadership and community involvement, and maintaining excellent academic performance. Focus on their interests, extracurriculars, and character development while also allowing them to explore and pursue their passions.

If you consider Tier 1 cities, then families of these cities spend almost an average of Rs 43,000 annually on the school education of their children. Tier 4 cities spend nearly Rs. 29,000 annually on children's education. In after-school education, an average parent spends 16,000 a year.   If you want to send your child to a quality university, you need to save money regularly for this goal for at least 8 years. Parents have to consider the rising education costs of education, and a suitable university, whether it is foreign or local. You also have to start saving towards living expenses like accommodation, food, transport, etc.  Applying for an education loan is the first option many parents consider when their child is ready for college. While you can opt for an education loan, it is advisable that you start saving money early in different investment schemes so that after 15-20 years, when your child is ready for college, the loan amount is reduced.  Ways to save for child education:  1. PPF Public Provident Fund is considered one of the safe investment options while investing for the long term where the funds are locked for at least 15 years. You can create a PPF account with any bank or post office and start saving your income for a good future return in the coming years. It has the ability to grow your money. The rate of interest of PPF in 2012 was 8.80 % which is now 7.60% in the year 2022.   2. Mutual Fund The fund grows when the market rises. The overall return after a long period comes through stocks, equity, debt, and even from money market funds. You can invest in a (systematic investment plan) SIP for both the short-term and long-term, and it is an efficient tool to save money.  Equity and debt are some securities where investors’ money is invested in mutual funds.  3. Fixed deposit A fixed Deposit is considered a safe investment option though the returns are comparatively low. If you invest a lumpsum amount through FD, you will get a fixed percentage on the amount. The interest rate ranges from 5.75% for regular investors and 7% for senior citizens for 1 year.  4. NPS National Pension System is a government-based savings option. The fund invests in government securities, bonds, and even equity. It provides investors with two options to invest in active and a default auto. In the auto option, the funds are invested in an automatic way. In the active option, the investor invests in the assets of their choice. It matures when the investor turns 60 years. The overall pension withdrawal amount is tax-free as per the scheme.  5. RBI bonds Taxable RBI bonds have a tenure of almost 6 years, and it gives an interest rate of 7.75% per year. It is available in the Demat mode, and it gets credited in the BLA( Bond Ledger Account) of the investor. For proof of investment, the bond is issued at Rs. 1000, and investors even get certificates of holding.  6. Direct equity Direct equity is another investment option to consider while investing in the long term. Though investors find it a risky option, the return is much higher compared to other investments. For 1, 3, and 5 years of investment, the return is 8,13, and 12.5 percent, respectively. source: pexels Hire a financial advisor  If you are still confused about the best savings option for your child’s education, then you can consider talking to the best financial advisors on the EduFund app. The financial advisor will guide you as per your financial needs and risk profile.    The upside is that all this can happen in a matter of minutes and a few taps without any hassle. Parents can take the expert's suggestion and invest the money accordingly to minimize risk and find a way to get a better return on investment. The financial advisors help you rebalance your portfolio on a regular basis to give your funds a better chance of growth when the market sees drastic changes.    Conclusion  As a parent, it is very important to start saving for your child’s education as early as possible to fight the rising costs of education. While applying for a loan is an option, it is wise to reduce the loan amount and save for most of the cost through investment to minimize or avoid the financial burden. FAQs How much do families spend on school education in Tier 1 and Tier 4 cities? Families in Tier 1 cities spend around ₹43,000 annually on school education, while Tier 4 cities spend about ₹29,000 per year. What's the importance of saving for education if you want to send your child to a quality university? To send your child to a quality university, regular savings for at least 8 years are crucial. Rising education costs and living expenses need to be considered. Should parents rely solely on education loans for college funding? While education loans are an option, it's advisable to start saving early through investment schemes. This approach reduces the need for larger loans in the future. Disclaimer:Mutual Fund investments are subject to market risks, read all scheme-related documents carefully.

There are many roadblocks to investing as a woman – unequal pay, lack of financial knowledge, lack of personal finance help, the burden of the pink tax, feelings of intimidation and confusion, etc.   But the winds are changing, and more and more women are taking charge of investing their money in personal goals, family, and their child’s education.   The conversation about money, wealth generation and the need to start investing early is finally brewing – let’s see how women can start their investment journey.  Why should women start investing?  Investments are the key to a brighter and financially independent future – whether it's early retirement or financing your child’s Oxford education in 10 years. Investment can help you attain these goals.   In India, the percentage of women investors is very low. According to Financial Express, only 14% of women are investing in mutual funds and 10% in stocks.  Women in India make the mistake of only investing in Gold or Fixed Deposits. The rationale that these investments are safe and secure prevents them from taking risks and aiming for wealth generation.   With the inflation soaring high, women investors who are earning can start investing as low as Rs. 100 every month. This small amount can benefit from the power of compounding and help them save for different goals like a holiday, a degree, a car, or an emergency fund!  Homemakers who have saved up some money can also invest! Starting an SIP for a mutual fund can help you save for different financial needs and get a greater interest rate than any savings account or FD investment. This can go towards their child’s education or a home. The great thing about starting a SIP is that you can pause as well as increase the base sum based on your income and savings! Create Goals before Investing Source: pexels When should women start investing?  ‘Right now,’- is the best time to start. Whether you are 18 or 40, investing can start at any time. Starting early does have its set of benefits but that should not stop you from saving right now. Most young investors enter the market in their 20s and 30s.    If you are new to investing, consult a financial advisor. Talk money with your accountant and understand what are your future goals and what is the best route to achieving them. They can help you invest in a bunch of tools that will not any diversify your wealth generation but also make it less risk-prone.   Consult an expert advisr before investing What kind of investments work better for women and why?  Investments are not gendered; anyone can invest in any investment tool. What matters is your risk profile, investment capacity, and goals. Here are some investments that women can explore:  1. Mutual funds   Mutual funds are a great way to start investing. You can simply begin with a SIP in your favorite fund. This allows you to invest a certain amount of savings every month, this amount is auto-debited from your account every month without the stress of manually investing the sum. Mutual funds are easier to manage than stocks because there is a fund manager to help protect your savings and investments.  2. Exchange-traded funds (ETFs)  An ETF is primarily a basket of assets and securities such as equity, debt, stocks, bonds, commodities, or currencies. You can purchase a unit of these securities, just like buying shares of a company. ETFs are like a cross between stocks and mutual funds, they are traded on the stock exchange and offer the diversification benefits of mutual funds.  3. Stocks  Stocks, known as equities, allow you to own a part of a company. There are shares for TATA, Reliance, Unilever, Nykaa, and thousands more available for investors to pool their money in. You can pick the company you believe will grow in the years to come. Buying stocks is more volatile and riskier in nature. The decision to buy and sell resides with you.     4. US Market  Investing in US Markets is possible for every investor and a great way to add geographical diversification to your portfolio. There are two ways to invest in US markets direct stocks or ETFs. This is an opportunity to make the most of the falling rupee and gain returns in dollars. US markets allow you to do rupee hedging; which means you will have more funds by allocating the same amount of money in dollars than in rupee because of the greater value of US dollars.   If you want to make wise investments then get in touch with a professional financial advisor. They can help you understand the value of choosing investments based on your goals, and risk appetite as well as how to shift your funds from one basket to another when the market fluctuates!   Invest in US Market 5. Investment mistakes to avoid   The biggest mistake a woman can make is not investing! Many women in India shy away from the market because of the fear of risk or knowledge. This decision can be detrimental in the long run and will be a huge hindrance in the face of wealth generation!   6. Fearing loss and not taking risks  Many women and men hurt their chances of wealth generation by playing it safe. They are too cautious and do not allocate enough funds to different assets and lose out on the money they could have accumulated over the years. Thus, don’t be averse to taking risks especially if you have time on your hands.    7. Allowing your partner to make an investment decision  Indian women rely on their partners to make investment decisions for them. To be truly independent, you have to manage your own wealth generation and investment portfolio. Try to be aware of the investments you make and whether they will help you achieve your goals in the future.  8. Putting their money in only physical gold   Gold is a great investment but it should not be your only investment. Indian women spend lakhs of rupees buying gold jewelry as a form of investment but they forget that there are maker charges, storage issues as well as the possibility of loss when reselling the items. Instead, if you are a gold-lover then look at Digital Gold, Gold ETFs, or Bonds to invest. It’s important to only keep some portion of your portfolio dedicated to gold.   9. Keeping cash in savings accounts or fixed deposits  Saving money in accounts or fixed deposits beyond a limit is counterproductive. Banks do not offer a great interest rate, which means your money is losing value against the rate of inflation in the country. Try keeping some money in the bank while a majority in growth-oriented investments like MFs, PPFs, ETFs, Bonds, etc.   Women in India are gradually catching up! With thousands of investment options, young women and men find it hard to remain neutral on the benefits and risks of investments. The only way to make money is to invest money. Investing can not only secure your future, but it can enable you. Enable you to send your child to the best schools or enable you to take that Europe trip. Big or small, investing can help you actualize your dreams faster than any form of wealth creation tool. FAQs Why should women start investing? Investments empower financial independence. In India, only 14% of women invest in mutual funds and 10% in stocks. Diversify from traditional investments to grow wealth. What investment mistakes to avoid? Avoid not investing out of fear. Don't rely solely on partners' decisions. Diversify beyond gold, move beyond savings accounts, and understand that caution can hinder growth. When should women start investing? Start now, regardless of age. Consult financial advisors for personalized plans aligning with goals. Begin with SIPs, mutual funds, and equities, and explore US markets. What investments work better for women? Investments aren't gender-specific. Consider mutual funds for steady growth, ETFs for diversification, stocks for ownership, and US markets for currency gains.

IDCW in mutual fund means Income Distribution cum Capital Withdrawal. It is a dividend option in the market of mutual funds, and one can term it IDCW Mutual Fund.  The change in the name introduced by (the Securities and Exchange Board of India) SEBI became operational in April 2021. Irrespective of the name change, the role of the dividends is the same. As per SEBI regulations, the investors must know that they can use and distribute the income capital as dividends.  Why did SEBI change the dividend name to IDCW?  The term means the distribution of income of a mutual fund scheme. It includes dividends paid by stocks and capital gains made by selling stocks from the scheme portfolio. The name change happened to highlight that the income is coming out of the depositor’s income value, which means the withdrawal of capital.  The term IDCW accurately represents mutual fund dividends and will remove any misunderstanding about mutual fund dividends for the investors as per SEBI.   The highlights of IDCW in mutual funds   The IDCW is mainly selected by investors who want to access a periodic inflow of funds. Note that the IDCW happens at the discretion of the fund manager. There is no specific assurance that it will be declared at periodic intervals.  Investing in an IDCW mutual fund is a great alternative to conventional investment instruments like fixed deposits or savings schemes. Senior citizens and investors who want to access low-risk returns can always consider IDCW mutual funds to brighten their investment portfolios.   Things to consider about IDCW in mutual fund There are many misconceptions floating around this field. Here are some facts that would help you break out of those misconceptions and plan better.   Mutual fund scheme dividends may include the ones received from underlying stocks in the portfolio and profits books by selling those stocks.  The dividends are not an extra income over the redemption profits you’ve made. The dividends, instead, are capital appreciation, which is ultimately paid from your capital. Therefore, the dividend scheme’s Net Asset Value (NAV) falls to the extent of dividends paid to you.  In the case of the growth option, the profits are reflected in the NAV and reinvested in the scheme.  At the discretion of the AMC or fund manager, a portion of the profit gets distributed to the investors in IDCW. However, it must be noted that this is not mandatory for an AMC under the dividend option. Tax benefits associated with IDCW in mutual funds   If you are a short-term investor, opting for IDCW in mutual funds is a viable option. That’s why an IDCW in a mutual fund is more appealing to conservative investors. However one cannot deny the importance of the tax benefits of IDCW in mutual funds.   Since the payout of IDCW in mutual funds is regular, whatever payout you receive is included in the income of the investor. And as IDCW offers an investor the promise of regular cash flow, you can always opt for such a mutual funds scheme. Note that the payout frequency of the IDCW is solely dependent on the fund manager.   IDCW pays out from the surplus investment accumulated. Income received by the investor as IDCW is added to the gross taxable income. Moreover, it is taxed based on the income tax slab rate of the investor.  Being a dividend distribution plan, dividends in IDCW exude practicality to the investors. Usually, retired investors want regular income from their portfolios. In that case, opting for IDCW in mutual funds is an excellent idea. Here are some noteworthy points of IDCW funds you should be aware of.   Based on SEBI, the dividends can only be paid from the profits earned by the respective mutual fund.   The payout rates of dividends may vary based on the payout cycle   Dividends paid on both debt and equity mutual funds can be taxed as per the investor’s tax slab.   Investment experts recommend the IDCW option when the market trajectory is moving upwards. During this time, the net asset values of funds rose consistently. Moreover, there is a greater likelihood of a fund declaring great dividends.   Where should investors invest? IDCW or Growth  Considering the in-growth option, the profits made by the scheme remain in the scheme investment. For long-term investment, the investor will profit for a long time. It is also known as compounding and will have a prominent role in wealth creation for investors.   IDCW in a mutual fund is something where the profits will improve the scheme, and the investor will get the best distribution with full or partial discretion of the fund manager with AMC. In this option, you will lose the compounding advantages the investors receive periodically. If the investor wishes to have a daily cash flow of the investment, then IDCW will be your best option.   Who should opt for the IDCW in mutual funds? IDCW in mutual funds is best suited for -  Investors looking for a regular income through their investments. Investors with low-risk tolerance levels.  Those looking for dividends during the bare market phase. Conclusion  Your choice of investment depends entirely on your financial goals. Moreover, you should also consider your investment horizon and tax situation to choose the best mutual fund. To be precise, IDCW mutual funds are suitable for those who want to have access to periodic payouts. Investing in mutual funds is a viable way to accumulate money for bigger purposes in life. If you want an investment portfolio with minimum risks, opting for IDCW is a better alternative.  FAQs Is IDCW income subject to tax? Yes, the IDCW income is added to your taxable income. It is subject to normal tax-slab rates. And if the dividend exceeds INR 5,000, there's also TDS on IDCW. What does IDCW stand for? IDCW stands for 'Income Distribution Cum Capital Withdrawal’. Can we change from IDCW to growth? Yes, you can. But it must be noted that depending on how long you had invested, the switch will attract capital gains and exit load.

There are various methods to choose from when it comes to developing a financial plan, but the proper plan needs a few components, regardless of the process utilized for creating it. Components for financial planning   1. Your net worth statement  Every financial plan demands a baseline. So, it is worthwhile to determine the net worth before finding a financial plan. Make sure to note down all the assets and debts. This will include investment accounts, bank accounts, valuable personal property, real estate, mortgages, student loans, and credit cards.   Make sure to deduct your liabilities from your assets to find your net worth. If you find that your liabilities are outweighing the assets, make sure to not be discouraged because when people are starting to establish a solid financial plan, it is something that happens. So, it needs to be considered when looking for the components of financial planning. 2. Financial goals  You cannot consider making a financial plan until you understand what you are going to do with your money. Your plan needs to begin with a complete list of goals, both small and big.   A proper list can help you organize all the goals. Be aware that your short-term goals will be those that you are hoping to achieve in the next 2-5 years. When it comes to medium-term goals, those are the ones that you want to achieve in the next 7-8 years. Finally, your long-term goals will be those that you want to achieve in the next 10 to 50 years. Listing down financial goals is one of the primary components of financial planning.   7 Types of Financial Planning Read More 3. Debt management  Having a debt management strategy is something that can help you reach your financial goals. If there is high-interest debt, ensure creating a strategy that can assist you to pay them quickly. You can also hire a financial professional advisor if you are not certain about where to begin. They will help you determine the amount from your budget that should be spent on the debts every month.   4. Cash flow and budget planning  Your budget assists you to find out where all your money is going and it helps you cut back to meet your goals. You can make use of a proper budget calculator to be sure that you do not ignore the important expenses. While jotting down your list, make sure to separate the expenses into two categories when considering the components of financial planning.   One category will have must-have items and the other will have luxury items. When you are considering how the financial goals will fit within the budget, make sure to consider all your expenses. You can also take the help of any advisor that offers procedures and tips that enable you to adjust particular assumptions to check how they would affect the savings plan.   Financial Planning Contingencies Read More 5. Retirement plan  You are going to need 80% of the income you're earning today in your retirement. But, you can also assume that retirement can free you from taxes and other work-related expenses. You must consider that medical insurance does not cover everything. You need to keep those expenses under long-term health care expenses. Make use of a savings calculator for your retirement to help you understand what you might require during your retirement period.   6. Insurance coverage  Insurance refers to an integral part of safeguarding your financial downside. Disability insurance, health insurance, life insurance, and home insurance are some of them. When it comes to life insurance, it is a good concept for people having dependents. Make sure to talk to an insurance professional to acknowledge what kind of coverage works best for you.   When it comes to disability insurance, just like the components of financial planning, it safeguards you and your family when you are not able to work. It replaces approximately 60% of your monthly salary. If you have a home or a car and you cannot afford to pay the entire bill from your pocket, ensure that you have adequate protection. The same is true with health insurance which can get you back thousands of money during a severe injury.   Wrapping Up  These components of financial planning are growing effectively to confirm that the present plans in your life are in a positive direction.   In a nutshell, you need to -  Keep a regular check on your enrolled plans, mutual fund, and assets;   Analyze your essential expense;  Cut down excess expenses for your future investment to be more structured;  Optimize your goals.   So, follow the above-mentioned components of financial planning to make your financial goals realistic as well as achievable. It is one of the best and workable ways to help take a step toward your financial goals. FAQs How do I determine my net worth? List all assets and debts (e.g., investments, bank accounts, loans), subtract liabilities from assets to find net worth. Why is goal setting essential in financial planning? Goals provide direction. Categorize them into short-term (2-5 years), medium-term (7-8 years), and long-term (10-50 years) goals. How do I manage debt effectively? Create a strategy to pay off high-interest debt. Seek advice from a financial advisor if unsure where to start. Why is insurance coverage crucial for financial security? Insurance safeguards against financial downsides. Types include disability, health, life, and home insurance, offering protection in various situations. TALK TO AN EXPERT

Investors always look for better investment opportunities to get regular returns. It helps them save taxes and create long-term wealth. While there are many investment options generating profits, they come under taxation according to income tax laws.  But, an investor can also save income tax by investing in a tax saver mutual funds. This article will explain what a tax saver mutual fund is and what are the numerous aspects that can help you make a good decision for investment.  https://www.youtube.com/watch?v=x9stEF-4ZuY Let’s understand the tax saver mutual fund.  Tax-saver mutual funds are just like any other mutual fund scheme. But, diving further into the concept of tax-saver MFs, let’s understand mutual funds.   A mutual fund is an investment fund that is professionally managed. It takes money from various investors to buy securities. It is generally used in India, Canada, and the United States. You can consider a mutual fund as a trust that takes money from many investors sharing a common investment objective. Now let us again come to tax saver mutual funds.   A tax-saver mutual fund helps investors save taxes. This initiative qualifies for a deduction of tax of up to rupees 1.5 lacks. Through these mutual funds, one invests in growth-oriented equity markets. It helps investors to get good returns and build long-term wealth.   Let’s understand this with an example. If you want to invest rupees 60,000 in a tax-saving mutual fund, this amount will be eliminated from your entire taxable income. It will reduce your tax burden.  How does a tax saver mutual fund work?  Tax-saver mutual funds collect money from many investors. They invest the money in the equity market. The equity market is the stock market or the share market which is a combination of cells and buyers of stocks. They may also include the securities that are listed on public stocks.   A tax-saver mutual fund includes a lock-in period of 3 years. It means that you cannot withdraw your money for 3 years. When you want to invest in mutual funds through the systematic investment planning route, the lock-in period for every installment remains to be 3 years.   When you are redeeming the units of a mutual fund, you can just get the units that have finished the period of lock-in. You can also redeem them at the present net asset value. Net asset value refers to the value of the fund of the investment without its liabilities. It is further divided by the shares outstanding.   You can invest some random amount or choose options for regular installments through systematic investment planning (SIP). When you invest with the help of installments, your installment is going to mature past 3 years from the date you have made it. Tax Benefits on Child Education Fees Read More It indicates that your last installment will be kept for 3 years from the date of investment, which is different from the first installment's maturity date.   The tax-saver mutual fund is the best option if you want to save tax. It offers many advantages because it comes with the unique feature of tax exemption. If you want to invest in a tax-saving mutual fund scheme, you need to learn and research the involved risks with every scheme.   You need to know that you do not have any kind of upper limit on the investment tenure, so you can continue giving your investment in the scheme if it seems to be profitable for you. Who should invest in tax-saving funds?  Tax-saving funds come with lots of good features and have been proven to give remarkable returns, but they may not be perfect for everyone. Here's who can invest:   If you are young and are paying taxes, you can make the most out of the dual benefit of investing in a tax-saving mutual fund.   Older people need to consider other investment options that come with no or lower capital risk.   Investments need to possess a flexible long-term horizon for reaching the best benefits or assuring better returns. So, it is recommended to invest for a duration of approximately 6 to 7 years to get long-term advantages.   Investors also analyze the track record of their fund after considering their investment based on their risk appetite and financial goals. So, it is ideal for young investors who can remain invested and take the best benefits. FAQs Which SIP is good for tax savings?  ELSS is the best SIP for good tax savings.   Can mutual funds be used for tax savings?  Yes, a tax saver mutual fund can be used for saving tax to a great extent in the long run.   Which is better, SIP or ELSS?  If you want to invest at the end of a financial year, then a tax-saving mutual fund will be the best option. But, if you want to have a constant source of income then SIPs are the best option. Who should invest in tax-saving funds? If you are young and are paying taxes, you can make the most out of the dual benefit of investing in a tax-saving mutual fund.   Older people need to consider other investment options that come with no or lower capital risk.   Investments need to possess a flexible long-term horizon for reaching the best benefits or assuring better returns. So, it is recommended to invest for a duration of approximately 6 to 7 years for getting long-term advantages.   How does a tax saver mutual fund work? Tax-saver mutual funds collect money from many investors. They invest the money in the equity market. The equity market is the stock market or the share market which is a combination of cells and buyers of stocks. They may also include the securities that are listed on public stocks. TALK TO AN EXPERT

In the previous article, we discussed how much salary to invest in mutual funds. In this article, we will discuss how to invest in direct mutual funds Mutual funds are the best way to peek into different and top-performing securities without constantly researching and handpicking them. It allows individuals the flexibility to invest and maintain excellent returns. It invests in stocks, bonds, and equities by pooling money from different companies.  Under this, an investor buys shares either directly or through a broker. The price that an investor pays per share is the net asset value plus other fees. Mutual funds are redeemable, which is one of their best features. An investor can sell the securities anytime, and the fund generally transfers the payment within seven working days. Direct and regular mutual funds make investing in mutual funds easier.  The blog talks about how to invest in direct mutual funds carefully. So, if you are worried about how to buy mutual funds directly, the blog is worth a read. What do direct mutual funds imply?   Direct funds are those offered by the fund house or Asset Management Company. AMC invests funds from clients by utilizing capital by investing in liquid assets like Stocks, bonds, real estate, and partnerships.  In “Direct” mutual funds, no third party intervenes in the transaction, and the investor directly interacts with AMC regarding the funds. Since the fund eliminates any third-party interaction, there are no brokerage fees or commissions here, and it is the primary difference between direct and regular funds. SIP in Mutual Funds Read More How do direct mutual funds differ from regular funds?   Direct and Regular Funds are the two options for investors to invest in mutual funds. These two differ drastically. The table below can be useful if you're having trouble deciding which to pick.  Direct mutual fundsIndirect mutual fundsIn this, the investor directly deals with AMC to purchase funds In this, the broker connects the investor with AMCAn investor can purchase an investment plan directly from the website The broker helps investors to pick the best plans. Direct Mutual Funds do not provide any facilities. The broker helps the investor with the account setup, documentation, and other legalities. No brokerage fees.The broker charges fees for his expertise and assistance.  The Total Expense Ratio (TER) and Net Asset Value (NAV) are significant parameters that investors must check before choosing the proper funds.  What are some tangible advantages of direct funds?  These funds have a lower expense ratio that translates into higher returns.  It keeps compounding for several years   It is better than reserving funds under the same scheme  Figure out the best way to invest in a direct fund and multiply your wealth.  Source: pixabay Top 8 mutual funds to invest in India in 2022?  Are you searching for the best direct mutual funds to invest in India? Check this out!  As per Economic Times’s June 2022 research, the best mutual funds to invest in are:  Parag Parikh Long-Term Equity Fund  Axis Bluechip Fund  Mirae Asset Large Cap Fund  Kotak Emergency Equity Fund  UTI Flexi Cap Fund  SBI Small Cap Fund  SBI Equity Hybrid Fund  Axis Midcap fund  Before exploring investment schemes in direct mutual funds in India, check the category and investment objective.  What are open-ended mutual funds? Read More 3 best ways to invest in direct mutual funds  You can invest in direct Mutual Funds both ways, online and offline. Invest online if you wish to avoid the hassle of conducting physical visits.  You will need to meet the KYC eligibility before investing. You must attach the following documents to become KYC compliant:  Identity proof (Aadhaar card, driving license, or Voter ID)  A PAN Card  Address proof  A passport-size photo  https://www.youtube.com/watch?v=7hXeSyWLiZ4 You can invest in Direct funds via many options.  Investment in Direct funds through AMC To invest in this, choose the scheme you like. Post that follows the below steps:  Step 1- Make an AMC account  Step 2- By choosing Plan Type as “Direct,” select the scheme  Step 3- Choose between Dividend and Growth. Choose according to the investment objective.  Step 4- Select an investment Plan or Lumpsum  Step 5- Select between a Demat account or trading without one  Step 6- Choose the payment Mode  Step 7- Confirm the bank details- IFSC code, account number, account holder name, and account type  Verify the details, and you are all set to go! Conclude the transaction using the verified payment mode. Once done, you will receive a quick ping confirming the same.  Invest in direct funds through a broker  One of the ways to invest in direct mutual funds is through a broker.    Choose a broker or a registrar to assist you in the process. The mutual fund program you want to invest in needs to adhere to the list, and the registrar or broker must have it in their brochure.  If confused, you can invest in the Direct Mutual Fund Scheme through SEBI. It has multiple platforms for Registered Investment Advisors, and you can leverage these.  Visit CAMS and KARVY, and view the investment opportunities on the portals.    Check out the mutual fund's utility option  Mutual Funds Utility is your best option if you wish to invest and transact across multiple utilities. It is a shared platform of unique fund houses.  You can begin investing in multiple funds just by creating an account. To invest in direct funds through MFU, CAN is mandatory. CAN (Common Account Number) helps check all the mutual fund portfolios and provides a consolidated view. You can create a CAN ID in 3 easy ways:  STEP 1: Visit the official website of MFU India   STEP 2: Select the CAN criteria  STEP 3: Select the holding Type  And you are good to go!   These are some ways to invest in Direct Mutual Funds. You can choose from online and offline modes. Pick the best Direct Mutual funds scheme and invest carefully. FAQs What are direct mutual funds? Direct mutual funds are offered by the fund house or AMC, allowing investors to directly interact with the AMC without third-party intervention, resulting in no brokerage fees. How do direct mutual funds differ from regular funds? Direct funds involve direct interaction with the AMC, with no brokerage fees. Regular funds involve brokers who charge fees for assistance and account setup. What are the advantages of direct funds? Direct funds have lower expense ratios, higher returns, and better compounding over the years, making them a preferable choice for investing. What are the top direct mutual funds to invest in India? As of June 2022, some top direct mutual funds in India are the Parag Parikh Long-Term Equity Fund, Axis Bluechip Fund, Mirae Asset Large Cap Fund, and more. TALK TO AN EXPERT

Individuals' interest in index funds is increasing due to an overarching desire to compound and capitalize on wealth.   Amid constant volatility in markets, it has become imperative to explore investment ways that dilute any potential risks of losing on high-return investments.  This is why people are incredibly inclined toward building different buckets instead of leaving all eggs in a single basket. In investment terms, diversifying the portfolio by investing in different equities and sectors is one of the best techniques to evade market risks.  It is where investment in index funds emerges as a market dominator in the current Indian scenario.   What are Index funds?  Index funds work differently from active funds. These funds are appropriate for those wishing to evade risk and diversify investment. One can only manage the investments passively.   It implies that a person cannot invest directly in an index but through mutual funds called “Index Funds.” A manager or investor invests in the same equities as present in the index.  The market index leverages a company’s market capitalization to determine the total weightage of securities in the index. The total value of the company shares is equivalent to the number of outstanding shares.  As per Economic Times, “Since February 2020, the number of index funds has surged 144% and the assets managed by these investors grew by 590%”.   As a part of the ongoing research by the Economic Times, “The number of index funds grew from 32 in February to 78 in July 2020”. ETF draws the investor’s interest during this phase.  https://www.youtube.com/shorts/FlrxZAJjemE Who should invest in index funds?   Investments in index funds are profitable only for a selective bunch. If you meet the below investment behavior, index funds are just right for you:  You wish to evade any risks associated with investment/slash investment risks  You want to diversify your portfolio by starting and investing a low amount  You prefer to invest only a fixed amount in a particular index fund  You would like to invest in multiple investment forms – like real estate, gold, equities  Early savings help in child's future Read More How to invest in index funds?   Index Funds are a type of investment vehicle like mutual funds and exchange-traded funds that help achieve results on specific indexes. Here is how you can invest in index funds:   1. Figure out your investment goals  Before investing, it is important to ensure clarity over the present and future financial goals.   When do you want to retire?   How long till you achieve your financial goals?   What do your risk appetite and budget look like?   2. Pick one index to invest in  Index Funds, apart from helping diversify the investment, track broad sectors like large capitals and emerging markets. Different index types serve different purposes.   While deciding on the index to invest in, analyze the below parameter:   Which industry do you share knowledge in and is growing lately?   How much is your risk tolerance?   What are the company size and market capitalization?  What index fund would you find comfortable investing in (stocks, bonds, or commodities)?   Highlighting and improvising on these parameters will help you choose the right index fund. It will help build a growth foundation.   3. Decide the index funds to invest in  Each fund and company has different marketing capital, growth potential, and shares available to invest in. The best research method is by researching Asset Under Management (AUM). It is the total investment value that an expert manages on the client's behalf. Analyze the AUM index of a given fund and the ease of trading.  Here are some best index funds for 2022:  IDBI Nifty Junior Index Fund Growth  ICICI Prudential Nifty 50 Index Plan Direct-Growth  UTI Nifty Next 50 Index Fund Direct-Growth  As per ClearTax - “IDBI Nifty Junior Index Fund Direct Plan-Growth, is one of the most profitable index funds in India."  Index funds companies can vary in their short and long-term costs.  4. Sign up for a brokerage account   After signing up for a brokerage account, utilize the above points to figure out the best index funds to invest in. Here, an investment expert may help you meet the purpose according to your financial goals.   In the initial stage, having expert backing works well. An expert can help you develop an investment strategy that aligns with personalized financial goals. It makes investment in index funds a smooth journey.   5. Manage investments cautiously   It is important to manage and check potential opportunities for growth. Start with small investments and set up automatic monthly deductions. Monitor the fluctuations and returns throughout the year. Modify the strategy if the market demands.  While Index funds are a great way to start investing, it's good to remember no market is without risks. FAQs What are the benefits of investing in index funds in India? Index funds offer benefits such as broad market exposure, diversification, low costs, and simplicity. They track a specific index, like the Nifty 50 or BSE Sensex, providing exposure to multiple stocks. Their passive nature keeps costs lower compared to actively managed funds. Index funds are easy to understand and suitable for long-term investors seeking market returns. How can I choose the right index fund in India? Consider factors like the index being tracked, fund performance, expense ratio, and fund house reputation. Look for funds with a low tracking error and a consistent track record. Evaluate the fund's size and liquidity. Read the scheme's offer documents, prospectus, and seek expert opinions to make an informed decision. What are the risks associated with investing in index funds in India? Index funds are subject to market risks and fluctuations. Their returns are influenced by the performance of the underlying index. If the index experiences a downturn, the fund's value will also decline. Additionally, tracking errors may occur, resulting in deviations from the index's performance. It's important to understand these risks and have a long-term investment horizon when investing in index funds. Consult an expert advisor to get the right plan for you  TALK TO AN EXPERT

Earlier we discussed the cookie jar investment method. In this article, we will discuss more investing options. Every investor wants to put their money into the best investment alternatives to get the best returns. Some people invest for financial security, while others meet their investment objectives.   Your investing alternatives are dependent on your risk tolerance, investment horizon, financial goals, and liquidity requirements.  In reality, risks and returns are precisely proportionate. That means the greater the risk, the greater the likelihood of returns will be. There are primarily two kinds of investment opportunities in the country.   That is financial and non-financial assets. We can further split financial assets into market-linked assets such as mutual funds, stocks, and ETFs. Some fixed-income products are bank FDs, PPFs, and Bank RDs.   Gold investments, real estate, Treasury bills, and other non-financial assets are also examples.   Let us now see which of these different investment options is suitable for India's various categories of investors.   Source: pexels Investment Options for Housewives   Housewives are often left behind in the race to make investments. However, there are many options in which a housewife can put her savings to grow her money.   Some of the best options are investments in direct equity (if they have a relative level of experience) and mutual funds. By investing in mutual funds, they can reap the benefits of professional management of their money and diversification of investment.   Investment in ETFs, bonds, and even PPFs are viable options to grow their savings over time steadily.  Investment options for salaried people  Salaried people often struggle with managing their expenses. As a salaried employee in India, you will have various investment opportunities to invest and increase your hard-earned money wisely.  Different instruments are available for investing ranging from traditional investment options like fixed deposits, recurring deposits, national pension schemes, and ULIPs to modern investment options such as investing in shares, cryptocurrencies, etc.   Investments in stocks and cryptocurrencies can provide returns as high as 10 to 15% per annum. At the same time, safer investment options include mutual investment in mutual funds like equity mutual funds and debt mutual funds.   Most risk-free investment options are bank fixed deposits, government bonds, etc. Salaried people have great potential to create wealth if they budget their expenses and investments.   Investment options for senior citizens  In old age, the thirst for returns is not as high as in youth. So, senior citizens usually need investment alternatives that mainly protect their money rather than growing it.   So, the need is for safe investment options. For elderly people over the age of 60, the Senior Citizens' Savings Scheme. It is one of the risk-free tax-saving investing choices available in the country.   It is one of the most significant investment ideas for seniors because they get a steady income in the form of a competitive interest rate of 8.6% per annum, making it a highly profitable investment option.  Another viable option is the Pradhan Mantri Vaya Vandana Yojana. It is for elderly adults aged 60 and up and provides them with a guaranteed return of 7.4% p.a.; pension income is payable monthly, quarterly, semiannually, or yearly depending upon the option selected.   Some other instruments include the Post Office Monthly Income Scheme and National Pension Scheme.   Low-risk investment options  Investments with low risk are always popular because they do not exhibit unnecessary volatility, so investors have less worry about the undertaking.   Low-risk investment options include Fixed Deposits, National Savings Certificates, Public Provident Funds, National Pension Schemes, and Gold. All these investment options are primarily fixed-income type investments – guaranteeing a particular level of return.   Gold has historically risen in value through tough times and often proves to be a hedge against inflationary pressure in the economy.   Investment options for students   As a student, you usually do not have too much money, but the biggest thing you have is time – which you can use to your advantage. Also, as a young investor, you have the option to take a significantly higher risk in terms of your investment options.   Students can invest even fundamental amounts through Systematic Investment Plans (SIPs) every month in mutual funds, index funds, and ETFs. Acquiring knowledge about bond investment will also be beneficial.   Since students have a higher risk appetite, they can also mobilize a small part of their investment amounts into cryptocurrencies after thorough research. Since there is less expendable money, choosing free brokers or low-cost brokers is essential.   Using simple rules of spending, students can save and invest small amounts over a long period and thus, grow their wealth. Investing Options - Summarised 1. Equity Shares Direct equity investment, out of all the investment options covered here, delivers the best combination of stock appreciation and dividends.   When a long-time horizon (10 years or more) is taken into account, equity markets can be somewhat unpredictable in the short run, but they provide greater inflation-adjusted returns.   You can diversify your portfolio by purchasing stocks from companies in different industries, allowing you to account for economic growth in other sectors.   Equity is the riskiest asset class due to the unpredictability of global markets and the probability of sectoral instability. When markets crash during difficult economic circumstances, there is always the risk of significant capital wipe-out.   2. Equity Mutual Funds Mutual funds that invest in equities are known as equity mutual funds. Instead of buying individual stocks in a specific industry, you can buy a mutual fund that encompasses that industry's growth. These are less hazardous due to their diversified nature.   An equities mutual fund invests more than 65 percent of its assets in the stock market (according to SEBI rules). An equity mutual fund can be active or passive.   Fund management's expertise also influences these mutual funds' performance.   3. Debt Mutual Funds Debt mutual funds, as the name implies, invest most of their assets in debt instruments. These funds are appropriate for investors with a moderate risk appetite and desire for consistent returns.   Government bonds, corporate bonds, treasury bills, and other money market instruments are also in the portfolio of debt mutual funds. Low risk does not imply that there is no risk.   Credit risk and interest rate risk are two risks that you should be aware of before investing in debt mutual funds.   4. Fixed Deposits (FD) A bank FD is safer than practically every other investment choice. With a high level of safety comes a poor rate of return.   FDs are a method to maintain your money where it is (returns are often so low that they don't even keep up with inflation), not a strategy to increase it.   Depositors have protected up to a maximum of Rs 5 lakh apiece in the event of a bank failure (under the Deposit Insurance and Credit Guarantee Corporation).   Bonds: Bonds are fixed-income securities representing a loan a borrower advanced to the investor. When governments or even listed companies want to raise money in the form of debt, they issue bonds to the public.   You can purchase these bonds in the bond market. Bonds offer fixed interest payments to the bondholders (a variable interest payment system is also there).   Bond prices and interest rates move in the opposite direction. At the time of maturity, the total principal has to be returned. There are different types of bonds, like government, corporate, and municipality bonds.    The risk of investment in bonds also arises from the possibility of potential inflation outstripping the rate of interest on the bonds.   Furthermore, when you buy bonds that are not well-rated, there remains a chance of default, wherein you might lose out on what you lent out.   5. National Pension Scheme (NPS) This investment vehicle is for people over 60. PMVVY offers a 7.4% annual guarantee.   Pension income, payable monthly, quarterly, bi-annually, or annually, with pension sums ranging from Rs 1000 to Rs 9250, is available. With a 10-year duration, the maximum investment amount is Rs 15 lakh.   The senior citizen, or their nominee in the event of the senior citizen's death, receives the maturity amount.   6. Public Provident Fund (PPF) PPF is a tax-free (interest) investment that lasts for 15 years. The government reviews the interest in PPF accounts every quarter.   A PPF account can also be opened with a monthly contribution of Rs 500. PPF is a remarkably safe investment because the interest received is covered by a national guarantee.   7. Gold Gold is often known to be a safe haven for investors. In your portfolio, gold will operate as a hedge.   In the past, gold has proven to be a winner when the economy has been in the doldrums. Gold is an attractive investment in the long run because of its rising price.   Digital gold, sovereign gold bonds, gold ETFs, and physical gold are options for purchasing gold. It's also a highly liquid asset to own. FAQs What are some low-risk investment options? Some low-risk investment options include Fixed Deposits, National Savings Certificates, Public Provident Funds, National Pension Schemes, and Gold. These options offer a relatively stable return on investment and are less volatile. Which investment options are suitable for senior citizens? Senior citizens can consider investment options such as the Senior Citizens' Savings Scheme, Pradhan Mantri Vaya Vandana Yojana, Post Office Monthly Income Scheme, and National Pension Scheme. These options provide steady income and are designed to protect their money. What investment options are suitable for salaried individuals? Salaried individuals have a range of investment options, including traditional options like fixed deposits, recurring deposits, national pension schemes, and ULIPs. They can also consider investing in stocks, cryptocurrencies, and mutual funds like equity and debt funds. What are the recommended investment options for students? Students with a higher risk appetite can consider investing in Systematic Investment Plans (SIPs) in mutual funds, index funds, and ETFs. They can also explore bond investments and allocate a small portion of their investment amount to cryptocurrencies. Using low-cost or free brokers is recommended for students with limited funds. TALK TO AN EXPERT

Mutual Fund vs FD is a long-standing debate in the financial arena. While one offers fixed and stable returns, the other offers a chance at wealth generation.  Fixed Deposits are the most popular and favored investment mode among Indian households. And why not! It feels safe to have an investment that guarantees a risk-free return. An FD allows you to put a lump-sum amount with the bank with a fixed interest rate and lay back for a good long period. Once the deposit matures, you can withdraw your money and enjoy the interest earned over the selected period.  Mutual Funds enable you to pool your money and earn a return. Every Mutual Fund has a portfolio manager who invests your money into stocks according to your risk appetite and ROI. Therefore, the return on Mutual Funds depends on the market conditions. Unlike fixed deposits, it does not have a lock-in period. Choosing the right investment journey for your child is the primary concern for every parent. If you are confused between Mutual Funds and Fixed Deposits, then look at both these investment options from various standpoints.  Inflation-adjusted rate of return  Inflation is the most crucial yet commonly ignored aspect of investment. It is the rate at which the value of your money decreases with time. Inflation reduces your purchasing power and creates financial instability.  In India, FDs do not offer an inflation-adjusted rate of return. The maximum rate of interest on FDs is 5% to 7%. However, the inflation rate in recent years has been recorded somewhere between 4-6%.  Inflation-adjusted return that you receive adds zero value to purchasing power. Instead, if the inflation rate goes higher than the interest rate, you will likely lose the money you have invested.  On the other hand, Mutual Funds are highly responsive to the market conditions. Also, they come with the benefit of compounding on SIP investments. You can start with an amount as low as Rs. 500, and your money will grow every month. Mutual Funds, especially equity-based mutual funds, are influential enough to adjust the impact of inflation on your money.  Risk Factor Fixed deposits feel safe on the surface because they are government-regulated. But, when it comes down to investing in your child’s education, the risk against this safety goes scary. The need of the hour is to grow your money. FDs may keep your money safe but add nothing to growth.  Mutual funds, however, allow you to mitigate the risk through portfolio diversification. You can identify your risk appetite and stash your money accordingly. Moreover, you have experts who guide you through your investment journey and help you attain your financial goals.  Tax Implications Tax payable on fixed deposits is subject to the Slab rate under the Income Tax Act, 1961, as amended from time to time. Also, the interest that you earn on FDs is tax-exempt under sec 80 TTB to the extent of Rs. 50,000.  Whereas, Mutual Funds listed under Capital Gains are taxable. The tax rate would vary depending on the Mutual Fund and its income. The duration for which the Mutual Funds are held before the sale is significant for taxation purposes.  Source: Freepik Liquidity  Keeping the persistent trend of Education Inflation in mind, it isn’t wise to lock your money into Fixed Deposits. Once you make a choice, you can not withdraw until maturity.  Mutual Funds come with no lock-in and are highly liquid. You can choose between a lump sum and a SIP investment. It enables you to start small but earns high market-based returns. You can take away your money at will! What are mutual funds? Read More Wealth generation With the pace at which the colleges are upscaling their fee structures, it has become challenging to keep up with the cost. Therefore, parents don’t just have to save but ensure wealth accumulation to pay for the price.  Unfortunately, fixed deposits fail here. The ultimate return you receive from an FD would fall far below the level of return you need. However,  if planned early and the right way, mutual funds are incredibly potent to help you reach your target. All you need to do is make the best out of the investment. Start early and extract the magic of compounding! Parents need to look at the broader picture when choosing an asset for their child’s education. Due to their low Inflation-adjusted return, fixed deposits are likely to fail as productive assets. And, it doesn’t matter how safe FDs are if they don’t help you meet your desired goals.  Mutual Funds offer you a safer opportunity to invest in stocks, especially if you don’t have the financial knowledge. Moreover, you don’t have to stress your pocket to invest. All you need is the magic of the 3Ps: planning, patience, and persistence! FAQs What is a Mutual Fund? A mutual fund is a financial trust that collects funds from investors and invests them into different instruments like stocks, bonds, and other money market instruments. How to invest in a Mutual Fund via the EduFund App? Step 1: Log in to the EduFund website or the EduFund app. Step 2: Complete your KYC and move ahead to create your investment account. Step 3: Choose the option of mutual fund investments. Step 4: Analyse your risk profile on the app by answering your household income and expense, the number of dependents you have, the highest level of maturity you have in terms of investments, your period of investment, and similar questions. Step 5: After answering the above questions, you will know what type of investor you are and the degree of risk you might be willing to take. The EduFund website or the EduFund app will suggest some mutual funds you might want to invest in, with a recommended SIP value. Step 6: Choose the fund and start investing. What is an FD? Fixed Deposits are the most popular and favored investment mode among Indian households. An FD allows you to put a lump-sum amount with the bank with a fixed interest rate and lay back for a good long period. Once the deposit matures, you can withdraw your money and enjoy the interest earned over the selected period. Consult an expert advisor to get the right plan for you TALK TO AN EXPERT

As an investor, there are many standard rules of money-making that you might have come across. In this article, we will learn about the very famous 15*15*15 rule. We will discuss the compounding magic that works wonders here.   The rule says that if you invest Rs 15000 per month for 15 years and generate 15% returns annually via a SIP in an equity mutual fund, then at the end of the 15 years, you will have an accumulated wealth amounting to Rs 10,027,601 (Rs 1.00 crore).   Breaking it down, we see that the total investment amount over the 180 months is Rs 15000 x 180 = Rs 27,00,000 – this means that the total returns you generate are equal to Rs 73,00,000.   The rule is so powerful that if you double the investment period from 15 years to 30 years, your accumulated wealth will equal Rs 10.38 crores (wealth increases 10x times).   The staggering figures that appear above are the result of compounding. What is compounding interest?  Compound interest implies interest earned on interest. The magic happens when you keep adding funds to your investment and do not break it.   As your invested value grows every year, the base (on which returns are generated) increases. The return generated also rises with time - this is how a very normal amount of Rs 15000 per month can lead you to become a crorepati in 15 years.  A time frame of investment is an essential factor when we talk about compounding. The more time you give your investment, the more returns you will generate. This is because your investment base is growing bigger and bigger over time.   As we saw above, doubling the investment time increases the wealth corpus by ten times.   Let us take an example to see how compounding works. Assume that person A starts to invest from the age of 20 and stops investing at 30 years of age, whereas person B starts to invest from 30 years until his retirement at 60 years. The table below clearly illustrates the magic of compounding.   Person A turned out to be the smarter among the two investors because he started his investment journey ten years earlier than person B and thus, was able to amass a fortune even with just one-third of the investment amount of person B.   The most considerable teaching that the 15*15*15 rule gives us is giving our investments ample time in the market; more importantly, the earlier you begin, the richer you become.   Mutual funds offer you high flexibility in switching from one category to another, with redemption at desirable times. To take advantage of compounding, start your investment journey today.