Fall 2024 Scholarship: Get Up to $10K for Your Master's Abroad! Fall 2024 Scholarship: Get Up to $10K for Your Master's Abroad!

Apply now
June 19, 2021

LIC Mutual Fund: Invest in High-Performing Funds

LIC mutual fund

The LIC Mutual Fund was incorporated in 1994 and started operating in the same year. Relatively, the fund is not large-sized, but it is certainly very stable and capable of providing constant returns over the past few years.

Its great USP is that despite its small size, the LIC Mutual Fund provides a plethora of different investment schemes.

The total assets under management of the LIC Mutual Fund have a value of 16,906 Cr as of 1 March 2021. The fund provides options for wealth creation, tax saving, regular savings, and the education of your children through the different investment schemes that it provides. These are divided into equity, debt, hybrid, ETF and index, and solution-oriented funds.

The primary shareholder of the LIC Mutual Fund is the Life Insurance Corporation of India. LIC is a government-owned insurance and investment company that is the largest insurance provider in India.

It was established by an act of parliament in 1956, with the merger of 245 state-owned life insurance companies. Life Insurance Corporation has more than 29 crore policyholders and a cumulative life fund of over 28 lakh cr.

In 2020, the Government of India announced that an initial public offering would be conducted for LIC in FY22. The executive board of the LIC contains the chairperson M.R. Kumar and managing directors Vipin Anand, TC Suseel Kumar, Mukesh Kumar Gupta, and Raj Kumar.

The LIC offers 7 equity schemes, 8 debt schemes, 4 hybrid schemes, 8 ETF and index schemes, and 1 solution-oriented scheme. The CEO of the company is Dinesh Pangtey, and there are nine members on its board of directors.

The AMC is named LIC Mutual DUnf Asset Management Ltd. It is owned 45% by the Life Insurance Corporation of India, 39.30% by LIC Housing Finance Ltd., 11.70% by GIC Housing Finance Ltd., and 4.00% by Union Bank of India.

As far as the trustee company is concerned, it is owned 49% by the Life Insurance Corporation of India, 35.30% by LIC Housing Finance Ltd., and 15.70% by GIC Housing Finance Ltd.

Important information

Name of the AMCLIC Mutual Fund
Incorporation Date20 April 1994
SponsorsLife Insurance Corporation of India
TrusteeLIC Mutual Fund Trustee Pvt. Ltd.
Board of DirectorsM.R. Kumar Kailash Kumar Bang Satish K. Kamat Sanjay A. Muthal Vijay Sharma Neera Saxena Raghunandan Maluste Y. Viswanatha Gowd Dinesh Pangtey
CEODinesh Pangtey
CIOSaravana Kumar A
AUMRs. 16906 Cr as of 1 March 2021
AuditorsS R Batlboi LLP
CustodiansStandard Chartered Bank
Address4th Floor, Industrial Assurance Building Opp. Churchgate Station, Mumbai 400020
Contact Number022-66016000
Emailcs.co@licmf.com
LIC mutual fund sahi hai

Best LIC Mutual Fund Schemes

While LIC Mutual Fund is relatively moderate in size, it offers various different schemes that have historically performed well in the market. Let us look at the ten best among these

1. LIC Large & Mid Cap Fund Direct

The LIC Large & Mid Cap Fund has been among the successful funds in the Indian market over the past few years. It has a Value Research rating of 4, and investors have realized returns of over 33% in the past year and almost 19% in the last five years, as of 1 March 2021.

Minimum InvestmentINR 5000
Minimum Additional Investment INR 500
Minimum SIP InvestmentINR 1000
Minimum WithdrawalINR 500
Exit Load1% for redemption within 365 days for units more than 12% of investment; Nil for redemption after 365 days
Return Since Inception:13.00%
AssetsINR 1028 Crore
Expense Ratio0.84%
*All values as of 1 March 2021

2. LIC Index Sensex Fund Direct

The LIC Index Sensex Fund is rated 4 by Value Research and is among the best-performing equity funds in the LIC Mutual Fund. It has an AUM of 34 Crore as of 1 March 2021 and has 44.8% over the last year and nearly 16% over the last five years.

Minimum InvestmentINR 5000
Minimum Additional Investment INR 500
Minimum SIP InvestmentINR 1000
Minimum WithdrawalINR 500
Exit Load0.25% for redemption within 7 days; Nil for redemption after 7 days
Return Since Inception:11.82%
AssetsINR 34 Crore
Expense Ratio0.57%
*All values as of 1 March 2021

3. LIC Index Nifty Fund Direct

The LIC Index Nifty Fund is an equity fund that has an AUM of 43 Crore as of 1 March 2021. It carries a Value Research rating of 3 and has returned more than 15% in the last five years.

Minimum InvestmentINR 5000
Minimum Additional Investment INR 500
Minimum SIP InvestmentINR 1000
Minimum WithdrawalINR 500
Exit Load0.25% for redemption within 7 days; Nil for redemption after 7 days
Return Since Inception:11.67%
AssetsINR 43 Crore
Expense Ratio0.48%
*All values as of 1 March 2021

4. LIC Large Cap Fund Direct

The LIC Large Cap Fund has been an extremely successful fund, giving it a Value Research rating of 3. Though it is a comparatively small fund with an AUM of 502 crores, it has returned 15% in the last five years as of 1 March 2021.

Minimum InvestmentINR 5000
Minimum Additional Investment INR 500
Minimum SIP InvestmentINR 1000
Minimum WithdrawalINR 500
Exit Load1% for redemption within 365 days for units more than 12% of investment; Nil for redemption after 365 days
Return Since Inception:12.74%
AssetsINR 502 Crore
Expense Ratio1.07%
*All values as of 1 March 2021

5. LIC Infrastructure Fund Direct

The LIC Infrastructure Fund is a high-performance equity fund that has among the highest returns for any fund in the LIC Mutual Fund. Since its inception, it has returned over 9% and has accumulated an AUM of over 60 crores as of 1 March 2021.

Minimum InvestmentINR 5000
Minimum Additional Investment INR 500
Minimum SIP InvestmentINR 1000
Minimum WithdrawalINR 500
Exit Load1% for redemption within 365 days for units more than 12% of investment; Nil for redemption after 365 days
Return Since Inception:9.78%
AssetsINR 62 Crore
Expense Ratio1.22%
*All values as of 1 March 2021

6. LIC Banking & Financial Services Fund Direct

The LIC Banking & Financial Services Fund invests exclusively in Banks and the Finance sector. It has been able to return nearly 13% in the last five years as of 1 March 2021.

Minimum InvestmentINR 5000
Minimum Additional Investment INR 500
Minimum SIP InvestmentINR 1000
Minimum WithdrawalINR 500
Exit Load1% for redemption within 365 days for units more than 12% of investment; Nil for redemption after 365 days
Return Since Inception:4.49%
AssetsINR 58 Crore
Expense Ratio1.49%
*All values as of 1 March 2021

7. LIC Flexi cap Fund Direct

The LIC Flexi Cap Fund is another equity fund that has performed rather well since its inception and has had a constant rate of return of over 12% a year over the last 5 years, as of 1 March 2021.

Minimum InvestmentINR 5000
Minimum Additional Investment INR 500
Minimum SIP InvestmentINR 1000
Minimum WithdrawalINR 500
Exit Load1% for redemption within 365 days for units more than 12% of investment; Nil for redemption after 365 days
Return Since Inception:9.75%
AssetsINR 359 Crore
Expense Ratio1.67%
*All values as of 1 March 2021

8. LIC MF Tax Plan

The LIC MF Tax Plan has an AUM of nearly 335 Crore as of 1 March 2021. It has had a constant annual rate of return that has been over 9% since its inception.

Minimum InvestmentINR 500
Minimum Additional Investment INR 500
Minimum SIP InvestmentINR 1000
Minimum WithdrawalINR 500
Exit LoadNil
Return Since Inception:13.90%
AssetsINR 335 Crore
Expense Ratio1.29%
*All values as of 1 March 2021

9. LIC Equity Hybrid Fund

The LIC Equity Hybrid Fund is a hybrid fund with an AUM of nearly 440 crore as of 1 March 2021. Its rate of return has been over 9% annually for nearly all of its existence.

Minimum InvestmentINR 5000
Minimum Additional Investment INR 500
Minimum SIP InvestmentINR 1000
Minimum WithdrawalINR 500
Exit Load1% for redemption within 365 days for units more than 12% of investment; Nil for redemption after 365 days
Return Since Inception:9.75%
AssetsINR 435 Crore
Expense Ratio1.38%
*All values as of 1 March 2021

10. LIC Debt Hybrid Fund

The LIC Debt Hybrid Fund is a relatively new offering from the LIC Mutual Fund and has provided a handsome rate of return of over 8% since its inception as of 1 March 2021. It has an AUM of over 80 crores.

Minimum InvestmentINR 5000
Minimum Additional Investment INR 500
Minimum SIP InvestmentINR 1000
Minimum WithdrawalINR 500
Exit Load1% for redemption within 365 days for units more than 10% of investment; Nil for redemption after 365 days
Return Since Inception:8.09%
AssetsINR 80 Crore
Expense Ratio1.50%
*All values as of 1 March 2021

How can you invest in LIC Mutual Fund via EduFund?

It is important to secure your children’s education, especially if you want to send them abroad. Saving money through schemes offered by LIC can be a great option if you are looking for a long-term investment. Here is how you can invest in LIC Mutual Fund using EduFund.

  • Download the EduFund app from the App Store or the Google Play Store.
  • Create an account on EduFund.
  • You will be asked for certain information about your ambitions for the education of your child. You can choose the country that you want to send your child to, whether you want to send your child for bachelor’s, master’s, or doctoral studies, and what type of subject you would like your child to study while abroad.
  • On the next page, you can select a rank bracket that you would like your college to lie in. You can also choose the kind of city that you want the college to be in.
  • As per the entered information, you will receive a list of colleges that match your criteria. There will also be a list of the mean tuition fees of these colleges for your selected major.
  • You can now choose the scheme of the LIC Mutual Fund that you want to invest in. As you browse through schemes, you will also be provided with the duration required to accumulate the amount of money that was previously calculated as required for your child’s education.
  • EduFund accepts payment by all legitimate methods of transaction.
  • Using the EduFund app, you can continue to track the performance of several different schemes, including the ones you have invested in.
  • EduFund also put you in contact with affiliated education counselors who have years and years of experience in the field of foreign education. They can help allay your doubts regarding majors, experience abroad, as well as financial matters.

Leading fund managers at LIC Mutual Fund

Once you have invested your money in a mutual fund scheme, its fate is in the hands of the managers of the schemes.

The importance of fund managers in a mutual fund can never be understated. Before investing in a mutual fund scheme, it is essential that you look at the performance of the scheme over the past few years and whether it is capable of providing you with the kind of returns that you desire.

However, at the same time, it is also essential to take a quick glance at the performance of the manager of the mutual fund that you are looking to invest in.

The performance of other mutual funds of the manager, the qualifications and experience of the manager are all considerations that must be kept in mind when you make a decision to invest your hard-earned money.

LIC Mutual Fund has some very experienced managers with different professional and educational backgrounds. Together, they form a really competitive team that is capable of taking the value of your money to new heights. Let us take a look at the profiles of the fund managers at LIC Mutual Fund.

1. Yogesh Patil

Mr. Yogesh Patil has nearly two decades of experience behind him and has managed some of the most stable schemes that have been provided by LIC over the years. 

Mr. Yogesh Patil earned his Master of Business Administration degree from Symbiosis Institute of Business Administration in Pune.

He worked at the Sahara Mutual Fund as a research analyst in equity for around three years, during which he was specifically involved in tracking the cement, power, capital goods, construction, and metal sectors.

He also managed the Sahara Blue Chip PMS Fund. He was then a part of Canara Robeco Asset Management Company Ltd. for nine years. He joined as a senior analyst in equity but was later made a senior fund manager.

As a fund manager, he was in charge of the Canara Robeco Infrastructure Fund and the Canara Robeco Tax Saver Fund. Under his management, the Canara Robeco Infrastructure Fund was ranked the foremost infrastructure equity fund by CRISIL for multiple quarters. Mr. Patil joined LIC Mutual Fund as a Fund Manager in 2018.

At LIC Mutual Fund, Mr. Yogesh Patil manages schemes such as LIC Multicap Fund, LIC Equity Hybrid Fund, and LIC BFSI Fund.

The LIC Mutual Fund Large Cap Fund Direct has returned a CAGR of over 14% under his management between 2018 and 2021. The LIC Mutual Fund Large and Mid Cap Fund Direct have returned more than 13% over the same period of time. Mr. Patil has an AUM of over 3000 Cr as of 1 March 2021.

2 Ritu Modi

Ms. Ritu Modi is the fund manager for several actively and passively managed schemes at LIC Mutual Fund. She has more than a decade of experience both as a research analyst and as a fund manager.

Ms. Ritu Modi completed her Bachelor of Commerce degree from Mulund College of Commerce in Mumbai. She later went on to earn her Master of Business Administration degree in finance from the University of Mumbai. She was a Research Analyst on Institutional Inequities at Ambit Capital for seven years.

Here, she specifically researched the Indian auto and auto components sectors. She also focused on sectors such as metals and mining, cement, ports & logistics, and healthcare. After Ambit Capital, Ms. Modi joined LIC Mutual Fund in 2018.

As a Research Analyst, She focused on sectors like consumer staples,  discretionary, retail, auto, and auto ancillary. Since 2019, Ms. Ritu Modi has been a find manager at LIC Mutual Fund.

Ms. Modi is a co-manager in actively managed funds and a fund manager in passively managed funds. She has an AUM of 925 Cr as of 1 March 2021. Under her joint management, the LIC Mutual Fund Index Sensex Fund Direct has grown at a CAGR of over 16% between 2018 and 2021.

The LIC Mutual Fund Index Nifty Fund Direct has appreciated by more than 14.5%, while the LIC Mutual Fund Large Cap Fund Direct has appreciated more than 14% in this time.

3. Marzban Irani

Mr. Marzban Irani is one of the most experienced fund managers at LIC Mutual Fund. He has well over two decades of experience and has served in leadership roles in several different asset management companies. He is currently the Chief Investment Officer for Debt at LIC Asset Management Company.

Mr. Marzban Irani earned his Bachelor of Commerce (Honours) degree from Mumbai University and his Post Graduate Diploma in Business Management from Chetna’s Institute of Management and Research, Mumbai.

He was then the Fund Manager for Fixed Income at Tata Asset Management Company for seven years. He then served as the Fund Manager of Fixed Income at Mirae Asset Global Investment Management India Pvt. Ltd for over two years, before moving on to PNB MetLife India Insurance as Senior Fund Manager for Fixed Income.

Subsequently, Mr. Irani joined Tata Asset Management as the Vice President for Fixed Income. He has also been associated with DSP Investment Managers. Mr. Irani joined the LIC Mutual Fund as the CIO for Debt in 2016.

Mr. Marzban Irani manages several debt schemes and has an AUM of over 4400 Cr as of 1 March 2021. Under his management, the LIC Mutual Fund Government Securities Fund Direct has yielded over 10% returns annually between 2018 and 2021. The LIC Mutual Fund Banking and PSU Debt Fund Direct have also returned a CAGR of more than 8% at this time.

4. Sanjay Pawar

Mr. Sanjay Pawar has more than 15 years of experience across various roles in the finance industry.

Mr. Sanjay Pawar earned his Bachelor of Commerce degree from the University of Mumbai. Posy this, he went on to study at the Bharati Vidyapeeth’s Institute of Management Studies & Research, where he completed a Master of Business Administration degree in finance and financial management services.

He was a Corporate Bond Dealer for ICAP before joining CRISIL as a Senior Research Analyst in Fixed Income Instruments. He was then an Assistant Team Manager at Edelweiss Securities Ltd. for four years.

Subsequently, Mr. Pawar joined Taurus Mutual Funds as a Fixed Income Dealer. He then joined LIC Mutual Fund as a Senior Dealer in Fixed Income and served in the position for two years before becoming a Fund Manager for Fixed Income.

Mr. Sanjay Pawar manages the LIC Mutual Fund Short Term Debt Fund Direct with an AUM of 680 Cr as of 1 March 2021. In 2020, the scheme provided returns of around 7%.

5. Karan Doshi

Mr. Karan Doshi has experience of eight years and has been with LIC since 2019. He completed his Bachelor of Engineering degree in Electronics and Telecommunication Engineering from K J Somaiya Institute of Engineering and Information Technology, Mumbai, and his Master of Business Administration degree in Finance from Guru Nanak Institute of Management Studies, Mumbai.

He was an Equity Research Analyst at Shubhkam Ventures Pvt. Ltd. for over five years, where he focused on the pharmaceutical and information technology industries. He then joined LIC Mutual Fund as an Equity Research Analyst, focusing on pharmaceuticals, information technology, and specialty chemicals.

Mr. Doshi manages the LIC Mutual Fund Debt Hybrid Fund Direct with an AUM of 92 Cr as of 1 March 2021. The scheme appreciated by over 10% in 2020.

Why should you invest in LIC Mutual Fund?

When you are planning the education of your child, the importance of the investment instrument you use is increased manifold. Even one small mistake can cause years’ worth of returns to turn into an opportunity cost, and your eventual financial goals become even more difficult to meet.

The importance of saving for your child’s education from an early age cannot be understated. Starting early can save you the inconvenience and difficulty that comes with having to scramble for funds years down the line when your child eventually wants to depart for one of the best educational institutions in the world.

The decision to invest in a mutual fund isn’t merely governed by those at the top who manage the fund. The advisors that interact with the customer must also be competent and trustworthy.

When you make a decision to invest in a LIC Mutual Fund, you can communicate the reason for your investment to your mutual fund advisor and trust LIC advisors to recommend the right find for your requirement.

Once you have communicated the quantum of funds you require to send your child for studies abroad, LIC Mutual Fund advisors will provide you with detailed recommendations concerning the funds that LIC offers.

In conclusion, the LIC Mutual Fund has been a beacon of trust for all its subscribers. It is incredibly stable and employs fund managers who are extremely competent at ensuring the appreciation of your funds.

LIC has nationwide coverage, and LIC advisors are qualified to provide you with the right recommendations for you and your kids.

Being one of the oldest financial companies in India, and moreover being owned by the government, it is possible to rest assured that your come is in safe hands with LIC. These factors make LIC a great option to ensure that you have enough money to educate your child abroad.

Invest in LIC Mutual Fund using EduFund

You can never be too early in deciding to invest in your child’s education. With tuition fees for education abroad rising by the year and admissions becoming more and more competitive, you would not want to be in a situation where your child gains admission to a great school, but you simply can afford the fees.

EduFund provides you with access to experienced financial advisors who can guide you through the process of investing in the right mutual funds for your purposes.

Services provided by EduFund are completely customized as per your need and requirements. The process of investment is also extremely simple and takes no more than a few minutes.

FAQs

What are some best LIC Mutual Fund Schemes to invest in?

Some of the top LIC Mutual Fund Schemes are LIC Large & Mid Cap Fund Direct, LIC Index Sensex Fund Direct, LIC Index Nifty Fund Direct, etc.

What’s the minimum amount I can invest in some of the top LIC Mutual Funds?

The minimum investment amount varies from scheme to scheme. However, some MF schemes like LIC MF Tax Plan have set Rs 500 as the minimum investment amount.

Can I invest in LIC Mutual Funds online?

Yes, you can start investing in LIC Mutual Funds from the comfort of your home today. All you have to do is download the EduFund App, complete your registration and KYC verification, explore your investment options, and start investing in the scheme of your choice. No paperwork required!

Want to invest?

Want to invest?

Open a Edufund account & start investing. It's fast & 100% free.

GET STARTED
US Stocks Bannar
Scholarships Bannar

recommended reading

4 essential tips on investing in your child's education

4 essential tips on investing in your child's education

Life becomes easier and more manageable with planning. A very important part of a happy and balanced life is managing your finances well. This responsibility becomes manifold if you have a family to provide for. Prioritizing the prior planning of your child’s college education can make your retirement life effortless and stress-free. Put away savings to preserve wealth. Invest money to generate more wealth. At the end of the day, gaining that fine balance between your savings, investments, and spending habits is what will secure a beautiful future for you as well as your family. Here are some pro tips on how to invest and save for your children’s college education. 1. When to start? Timing is everything. The logic is simple - the earlier you start, the more wealth you can generate and accumulate. You may begin as early as the family planning stage itself. Even if you do not have a clear sight of the stream of academics your child might pursue later in life, it does not hurt to put away money. As your child grows up, they might decide upon what line of academics they want depending on their career goals. Your savings will come in handy in reassuring your child that you are perfectly prepared to back them in realizing their dreams as there will already be a considerable amount of funds they can count on. 2. Compartmentalise your savings The habit of saving money regularly is one of the healthiest habits one can inculcate. But mastering the art of saving requires self-regulation and a sense of organization. Putting away a bulk of money indiscriminately is not the most effective way of saving. Keep track of your expenses and your income; device upon an amount you can afford to put away as savings. Make a list of all the things you need to save for - emergencies, education, health, housing, and so on. Divide your savings accordingly. The act of compartmentalizing savings can also be effective in regulating your spending habits. You can also inculcate this healthy habit in your child from an early age by encouraging them to save money from their monthly allowances. 3. Consider different investment options Investing is always an improvement upon saving because investments can generate new wealth. Thus, it is not enough to just put away money as savings; you also need to allocate funds to certain investments that suit your monetary goals. There are different kinds of investment channels you can opt for. Some of us prefer fixed or recurring deposits while others want to generate more returns and go for mutual funds. Mutual funds can be of different types depending on the factors like the amount of risk, duration, return rates, etc. The mode of payment can also vary. For example, you can go for a one-time investment or you can choose monthly SIPs. Be well aware of all kinds of investment plans available so that you can choose the best one for yourself. 4. Invest in a global education Your savings and money made from investments will be especially useful when you send your child abroad to pursue a college education. Even if you are not sure about the possibility of global education in the future, it is always advisable to remain prepared for the same. Simply saving money is not enough. Investing is a better idea and in the case of global education, it can be beneficial to invest in foreign stocks. This is because the value of the Indian currency is forecasted to fall in comparison to other stable currencies in the world. This means that the cost of living and studying abroad will be way higher than the cost of living and studying in a new city within India. Once you set your financial goals, find out about investment schemes with international equity funds from countries like the US, so that you can make money in a more stable currency. Conclusion There can be several investment goals relating to different parts of your life like yourself, your spouse, relatives, housing and accommodation, health, gadgets, and emergencies. Mixing these up will only cause chaos and distress. Hence, it is important to think separately about saving for your children’s college education and indulge in smart investments. Consult an expert advisor to get the right plan TALK TO AN EXPERT
4 W’s of Balanced Advantage Funds

4 W’s of Balanced Advantage Funds

What is a Balanced Advantage Fund? A balanced advantage fund is a fund that can invest 0-100% in the equity market or 0-100% in the debt market dynamically as per the prevailing market condition. For example - If a fund manager finds that the price of the equity market has gone up, he will tilt the portfolio more toward the debt market. Likewise, if the equity market trades at a discount, then the fund manager can tilt/shift the portfolio toward the equity market.  The valuation is the internal process of the fund. Based on valuation, the fund manager can take the call. This way, the fund manager can take the opportunity and change the asset allocation. The fund manager can go aggressive in the equity market or can also decide to play conservatively to reduce the portfolio's volatility. The aim is to minimize the portfolio's downside risk and maximize the returns.  Who should invest? Investors who are looking for long-term wealth creation. Investors who are not comfortable with the market volatility. Investors who do not want to face high volatility and looking for equity-like returns. Investors who are unsure which type of fund they should invest in, whether in the equity or debt-oriented fund. Risk-averse equity investors with an investment horizon of more than three years. Additional read: Financial mistakes to avoid Why should you invest? A balanced advantage fund is a dynamically rebalancing fund between two asset classes, i.e. equity and debt. It has the complete flexibility of rebalancing from 0-100% in both asset classes. It provides you with better risk-adjusted returns. It manages the equity market volatility and provides stability in the portfolio by diversifying the portfolio into the debt market. It offers you equity-like returns, which help your portfolio to grow at a much faster rate than debt funds and also helps you to beat inflation. Minimizes the downside risk and provides scope for growth by investing in the equity market. When should you invest? When the volatility in the equity market increases you do not want to have such high exposure to the prevailing volatility. When you want equity-like returns but do not want to face high liquidity. First-time mutual fund investor looking for long-term wealth creation. Conclusion Try to allocate some portion of your portfolio towards a balanced advantage fund if you want to reduce the portfolio's volatility. A balanced advantage fund is like a season fund. FAQs What is a Balanced Advantage Fund? A Balanced Advantage Fund can dynamically invest 0-100% in either the equity or debt market, depending on market conditions. Who should consider investing in Balanced Advantage Funds? Investors seeking long-term wealth creation, those uncomfortable with market volatility, and those unsure about equity or debt-oriented funds can benefit. Why invest in Balanced Advantage Funds? These funds offer flexible asset allocation, better risk-adjusted returns, and stability by diversifying into the debt market. They provide equity-like returns, growth potential, and risk mitigation. When is the ideal time to invest in Balanced Advantage Funds? Consider these funds when equity market volatility increases, and you want equity-like returns without excessive risk. What is the aim of Balanced Advantage Funds? The aim is to minimize portfolio downside risk, maximize returns, and adapt to market conditions, providing both stability and growth.
5 financial things to consider before child planning.

5 financial things to consider before child planning.

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
5 investment plans every parent should have

5 investment plans every parent should have

As parents, we have a profound responsibility to ensure a bright and secure future for our children. While providing love, care, and education are crucial aspects, financial planning plays a pivotal role in setting the stage for their success. Investing wisely is key to securing their future aspirations and safeguarding against unforeseen circumstances. Let's explore five essential investment plans that every parent should consider, ranging from mutual funds and US ETFs to US stocks and insurance. So, we will dive in and discover the strategies that can pave the way for your child's financial well-being. Education Fund: The Power of Mutual Funds One of the most crucial investments you can make as a parent is in your children's education. Start by setting up an education fund that specifically caters to their academic pursuits. Consider tax-efficient options like a 529 plan, which allows you to invest in a variety of mutual funds, ensuring growth potential while enjoying tax benefits. Platforms like EduFund (www.edufund.in) offer valuable guidance and tools to help you plan and manage your child's education fund effectively. investment plans US ETFs: Diversification Made Easy 1. Exchange Traded Funds Exchange-Traded Funds (ETFs) have gained significant popularity in recent years due to their flexibility and global exposure. Just like mutual funds, ETFs represent a basket of securities, including stocks, bonds, commodities, or a combination thereof. However, unlike mutual funds, ETFs are traded on stock exchanges throughout the trading day at market prices. ETFs offer several benefits, including transparency, liquidity, and cost-effectiveness. Parents can buy and sell ETFs at any time during market hours, allowing for more flexibility in managing their investments. Additionally, ETFs disclose their holdings daily, ensuring transparency in the investment portfolio. With generally lower expense ratios compared to mutual funds, ETFs offer a cost-effective investment option for parents. 2. USA Stocks For parents who are comfortable with taking on more active roles in their investment journey, investing in individual stocks can be an exciting avenue. Owning shares of well-established companies can offer substantial returns over time. While investing in individual stocks requires careful research and monitoring, it can provide the potential for higher growth compared to mutual funds or ETFs. EduFund's resources can assist you in understanding stock investing basics and identifying companies with strong fundamentals. To mitigate risk, parents can consider diversifying their stock portfolios across different sectors and industries. This diversification helps reduce the impact of a single stock's performance on the overall portfolio. In addition, parents should adopt a long-term investment mindset and focus on the fundamentals of the companies they invest in rather than short-term market fluctuations. Investment Tips for Dad's in India Read More Insurance - Protecting Your Family's Future Insurance is a pivotal component of any comprehensive financial plan, especially for parents. Life insurance provides financial protection to your family in the event of your untimely demise. It ensures that your children's education, living expenses, and future aspirations are secure, even in your absence. Term life insurance offers coverage for a specified period, providing a higher coverage amount at an affordable premium. Additionally, health insurance safeguards against unexpected medical expenses, offering peace of mind during uncertain times. By securing adequate insurance coverage, parents can safeguard their family's financial well-being and ensure a secure future. Investment Tips for Mom's in India Read More Mutual Funds - Diversify and Grow Your Wealth Mutual funds are an excellent choice for parents seeking diversification in their investment portfolios. These funds pool money from several investors to invest in a variety of asset classes, including stocks, bonds, and money market instruments. Managed by professional fund managers, mutual funds allow parents to benefit from their expertise and experience in making investment decisions. By spreading investments across different sectors and markets, mutual funds help reduce the risk associated with investing in individual stocks. Parents can choose from many types of mutual funds on the basis of their risk appetite and financial goals. For those seeking stability, bond funds can offer a regular income with lower volatility. On the other hand, equity funds offer an opportunity for capital appreciation through investments in stocks. Balanced funds offer a blend of both equity and bond investments, providing a balanced risk-return profile. By investing in mutual funds, parents can access professional investment management and enjoy the benefits of diversification. You can lay a strong foundation for your family's future by incorporating these investment plans into your financial strategy. Remember that investment decisions should align with your risk tolerance, financial goals, and time horizon. It's always suggested as advice to seek guidance from financial advisors who can provide personalized advice based on your specific circumstances. Conclusion  Investing wisely is an integral part of parental responsibility. By incorporating these five investment plans into your financial strategy, you can take proactive steps toward securing your child's future while also protecting your own financial well-being. Remember to conduct thorough research, seek professional advice, and regularly review your investment portfolio to adapt to changing circumstances. By combining long-term vision with disciplined investment practices, you can build a strong financial foundation for your children, allowing them to chase their dreams with confidence. Start planning today and pave the way for a prosperous future for your family. Consult an Expert Advisor
5 reasons why SIP is the best investment choice?

5 reasons why SIP is the best investment choice?

A systematic investment plan or SIP is the best plan that helps you invest in mutual funds on a regular basis.  You can choose to invest weekly, monthly or even quarterly – the most popular choice being monthly. There are multiple reasons why SIPs are the best way to grow your money especially when you have a goal to plan – e.g. your child’s education. SIPs can be bought easily and you can start with a very low amount - Rs. 500 per month. In this blog, we will talk about the ‘Big 5 advantages’ that SIPs offer to you as a parent. But before that, let's understand what a SIP is What is SIP? A SIP or systematic investment plan is an investment mode through which an investor can create a regular mechanism of investment for themselves. Let's take the example of investor X. Investor X wishes to invest Rs. 10,000 every month in a mutual fund. In this case, investor X can create a SIP for a fund they want to invest in and the money will be deducted every month automatically (the deduction can be weekly, monthly, or even quarterly, depending on the investor's choice). Think of it as a recurring deposit, with better returns. Now that we know what a SIP is, let's get to know why investing via SIP is the best choice you can make to enlarge your corpus. CALCULATE MONTHLY SIP 5 Reasons SIP is the best These are the 5 main reasons why you should invest via a systematic investment plan to reach your financial goals 1. Suitable for Long-Term Investment Any financial advisor will tell you that if you want to invest long-term, SIP is the way to go. The reason is simple, regular investing and automatic deductions keep investors motivated to stay invested and reach their investment goals quicker. During the 2008 financial recession, many people withdrew money from mutual funds. However, the ones that remained invested via SIP, attained a huge profit once the markets rose. Long-term investing makes sure that even if the market is down at the moment, once the markets rise, the investor will make profits. 2. Goal-planning ‍SIPs are good tools to plan for a future goal – to buy a 4-wheeler or to pay for college tuition fees maybe 10-15 years from now. When you determine the amount required to achieve your goal, you will know how much you should invest and how long it will take to reach your goal. This will help in planning effectively. Having financial goals is very important to creating a financially secure future. One must have a defined idea about what financial goal one wants to reach by the age of 30, 40, 50, and so on. 3. Effect of Compounding Compounding is one of the biggest advantages of a SIP. Over time your investments grow because you start earning returns not on your principal amount, but on the interest that keeps getting added to it. Let's take an example. Suppose you invest Rs.1,000 in a mutual fund that gives you a yearly return of 10% p.a. Your amount becomes 1,100. at the end of the first year. At the end of the second year, the rate of return is 11%, this time the returns will be calculated on Rs. 1,100 and not the principal amount, which is, Rs. 1,000. ‍This ensures the growth of your corpus and is one of the reasons why experts advise you to not withdraw your investments when the market is down. 4. Curated by Experts With the increasing number of fund types like equity, debt, mixed, gold-based, etc. there is a wide variety to choose from based on your risk appetite and preferred investment duration. This has led to customized offerings based on individual needs, supervised by experts in the SIP domain. All you need is to specify your goal and timeline and you are provided with the best possible funds that can meet your future goals. ‍SIPs have become popular over the past few years, because of the ease of investing and the flexibility provided in terms of the amount of money that can be invested. You can stay invested as long as you want, although average returns have been higher when invested in the long term. Research also shows that the returns offered by SIPs are more than recurring deposits in banks, in the long term. 5. Automates Your Investment Experience SIPs automate your investment experience, which makes you a regular investor. It is easy and convenient and because of the online surge, today, it is super easy to invest via SIP. If you choose the lump sum method, you will have to manually invest an amount and there may be times when you can miss an installment. ‍With automated installments and a streamlined process, investing via SIP has now become an extremely popular method, to reach long-term goals like saving up for your child's education. FAQs Why is SIP investment good? By investing through SIPs, you will do away with the burden of timing the market as you could then avail the benefit of Rupee Cost Averaging. By investing through SIP, you will tend to invest in the up and down markets. This helps you shy away from the volatility of the market. Additionally, you will benefit from the power of compounding, which fundamentally generates returns not only on capital but also on returns. Is SIP good for students? Investing in SIP can be a huge benefit for students. It cultivates a healthy investment habit, and they can invest a small amount to start their journey. SIP is best for beginners and a comparatively safe investment vehicle. What are the features of SIP? A SIP offers the following features: It is best for long-term investment, brings financial discipline, allows small investment amounts, benefits from the power of compounding, and is a comparatively safer investment tool. Why do people prefer SIP? A systematic investment plan helps bring discipline to an individual’s investment habits. A SIP will automatically deduct a pre-decided amount periodically. Investors also do not need to worry about timing the market while investing via SIP. It is one of the best investment vehicles for beginners. Consult an expert advisor to get the right plan TALK TO AN EXPERT
SIP
5 tips to know before investing in US stocks

5 tips to know before investing in US stocks

If you want to invest in the US stock market to benefit from US stocks, you may start by opening an international trading account in India. But before investing in US equities, here are the 5 important things to know before investing in US stocks. 1. Regulatory framework One of the oldest, most effective, transparent, and well-regulated stock markets in the world is the one in the United States. On US stock markets are listed some of the largest businesses in terms of market capitalization, sales, and profitability. The worldwide exposure and flavor that US markets offer are crucial since many of these listed firms have a significant global presence, scale, and operational structure. The regulatory body that monitors the operation of the US stock markets is the Securities and Exchange Commission (SEC), which was founded in 1934. It guarantees the strict application of laws and rules that establish the highest standards of openness and integrity—essential for stock markets as well as for the safety and trust of investors. 2. Impact of Foreign Exchange  The volatility in the value of the US and other currencies should be taken into account while investing in US equities. This is because before any gain (or loss) for an Indian investment is realized, it would be converted using the appropriate exchange rate in the Indian rupee. The gains (or losses) will fluctuate in lockstep with changes in the exchange rate. An Indian investor must be aware that the exchange rate can be unpredictable and is influenced by a wide range of political, economic, and supply and demand variables. 3. Liberalized Remittance Scheme According to the Reserve Bank of India's Liberalized Remittance Scheme, an individual may invest up to $ 250000 per year in US equities from India (LRS). The cap covers any money sent abroad for purchases, travel, education, or other international transactions during the year. The investor's brokerage account has to be filled before making any investments in US equities. Investors must complete Form A-2, which is available from RBI-authorized dealers. Any sum over the $250000 cap requires RBI approval. Additional read: US stocks for investing in child education 4. Taxation To make your efforts worthwhile, it is crucial to take into account the tax consequences of your international assets. Due to the Double Tax Avoidance Agreement (DTAA) between the US and India, the same income cannot be taxed twice on investments made in the US stock market. 5. Dividend tax The dividends from US stocks are taxed at a fixed rate of 30% for overseas investors. However, as a result of the tax agreement between the US and India, citizens of India pay a 25% tax rate (deducted before distribution). However, because of the double tax avoidance agreement between the US and India, the tax paid in the US may be claimed as a foreign tax credit in your domestic filing. 6. Capital gains tax Your assets in the US are not subject to capital gains tax. However, India requires you to pay tax on your overseas capital gains. This may be divided into two groups.: Long-term capital gain (LTCG)If you keep the equities for more than 24 months before realizing capital gains, you will be subject to indexation advantages and a 20% tax rate in addition to any relevant fees and other surcharges. Short-term capital gain (STCG)Standard income-tax regulations apply to any gains from assets held for less than 24 months, and they are added to your ordinary taxable income. You must also take into account the recently implemented Tax Credited at Source or TCS. Under the new regulations, a 5% TCS will be applied to all international transfers over INR 7 Lakhs in a fiscal year. It is not an additional expenditure to deduct this advance tax when submitting your taxes each year. Charges on US stock-broking account  Using an Indian stock brokerage account to invest in the US stock market is prohibited. You would need to create one with a US stock brokerage company instead. To provide this service, the majority of Indian stock brokers who allow you to invest in US equities typically collaborate with a US stockbroker. You would also be required to pay certain fees for a US stock broking account, just like you would for an Indian trading account. This is something you should also take into consideration when you buy US stocks because these fees can reduce your earnings. These fees include Annual Maintenance Costs, brokerage charges, bank charges, transaction charges, and more. Invest in the US stocks with EduFund  Download the EduFund app and create an account to start investing in US stocks. With zero charges and no hassle account opening process from the comfort of your home, you can start investing in FAANG stocks in your portfolio to geographically diversify your portfolio!! Thus, investing in US firms and equities may give investors access to the worldwide market, credibility, and an opportunity to increase their wealth. Consult an expert advisor to get the right plan TALK TO AN EXPERT
5 top investments for risk-averse investors

5 top investments for risk-averse investors

All investments are associated with risks. Yet, the risk is not uniform, and it's essential to be aware of the different levels of risks linked with all types of investment instruments. This is why the first thing to consider before investing is how much of a risk appetite has – how much risk one is willing to take. Want to know the best investment options for risk-averse investors but still generate good returns? Continue reading this article to know more! What is risk averse? Risk-averse refers to an investor who chooses to preserve the capital over and above its potential to generate returns that are higher than the average. Risk can refer to many factors – volatility, currency, market, credit rating, etc. Risk-averse can also refer to a conservative investor. Low risk symbolizes stability in investments. A low-risk investment generates guaranteed reasonable returns, if not outstanding, above benchmark returns. But chances are near zero that the principal investment amount will be lost. Whereas a high-risk investment option may gain or lose money over time. Risk-averse investors are unwilling to accept market volatility. They prefer their investments to be highly liquid - readily available to be withdrawn. Such investors usually include old investors or retired individuals who depend on their savings for their daily expenses. Start Investing in Mutual Funds Is FD a good option for risk-averse investors? One should constantly adjust their returns against the current inflation rate. The current Fixed Deposit interest rates are 5-7% p.a. on average. But the current inflation rates are around 6-8% p.a. Give these figures a thought. The price you pay for your everyday goods and services is rising at 6-8%, whereas your FD investments are growing at only 5-7%. FDs do not increase the value of your money over time. In fact, you actually lose money or its purchasing power over time. Do you think FDs are the safest investment option? Banks defaulting on payments is rare but definitely possible. The Deposit Insurance and Credit Guarantee Corporation (DICGC) guarantees Rs. 5 lakhs per person per bank if the bank defaults. Let's not forget the liquidity part of this instrument. Fixed deposits can have a lock-in ranging from 3-5 years. Banks penalize the investors for withdrawing money before the lock-in is over. This penalty is in the form of a reduction of interest rate by a certain percentage. Download App and Start Saving for Child Education What are the best investment options for risk-averse investors? The market is filled with many investment options for investors with varying risk appetites. Let's look at some of the best investment options for risk-averse investors: 1. Short-term bond fund The best alternative for investors who do not want exposure to FDs or volatile instruments. Short-term bond funds – bond funds with low maturity and a high potential to offer better returns. Debt Funds with longer maturity are subjected to interest rate risk. But short-term bonds have a lower interest rate risk as their maturity period is much lower. 2. Municipal and Corporate Bonds State and local governments and companies usually raise money by issuing bonds to the public. Bonds offer lower risk than stocks. When a company is winding up, the bondholders are given first preference in the payment and settlement order. 3. Other debt funds Other debt funds include banking and PSU Funds, ultra-short duration funds, Dynamic Bonds, etc. You could always invest a lump sum in these debt-based mutual funds and opt for a Systematic Withdrawal Plan (SWP). This would ensure that along with the returns being generated on your investments, you would also get a monthly income from these investments. This investment option is one of the best options for older people who want a monthly income. 4. Liquid funds Invest in top-rated liquid funds to avoid loss of capital with a higher degree of safety for your primary investment. Also, when the market moves up, your investment performs better and generates higher returns in line with the market. 5. Dividend growth stocks Stocks are not as safe as cash, savings, or other debt-based instruments. But they are safer than options and futures. Dividend-paying stocks are considered safer than high-growth ones as they minimize volatility, if not eliminate it. You don't depend on the value of the stock as you get a dividend as a regular income on your investment. Apart from debt-based investments, you could also apply a staggered investment approach in equity-based mutual funds for a long-time horizon. A periodically rebalanced portfolio helps you minimize your portfolio volatility and ensures efficient capture of up-market and down-market movements even with equity exposure.  Take the help of an Investment Advisor who will guide you through goal-based planning and help you choose the investments that are most suitable to your goals and objectives and your risk appetite. FAQsWhat type of investments do risk-averse investors prefer?  Risk-averse investors typically prefer conservative investments with lower volatility and more predictable returns. These may include government bonds, high-quality corporate bonds, certificates of deposit (CDs), and stable dividend-paying stocks. These options aim to preserve capital while providing modest growth, aligning with the risk tolerance of such investors.   What are 3 high-risk investments?  Three high-risk investments include investing in individual stocks of volatile and speculative companies, trading in cryptocurrencies known for their price volatility, and investing in startups or early-stage ventures that have higher failure rates. These investments offer the potential for significant returns but also carry a substantial risk of loss.   Which investment is the riskiest for investors?  Investing in highly speculative and unproven assets like cryptocurrencies, especially in lesser-known or new coins, can be among the riskiest options for investors. The volatile nature of these assets can lead to substantial financial losses due to sudden price fluctuations and lack of regulation.   Which investment has the highest return without risk?  No investment offers guaranteed high returns without any risk. Investments with potentially higher returns often come with varying degrees of risk. While some low-risk options like government bonds or savings accounts provide stability, they usually offer lower returns. Diversification and a clear understanding of risk are important for any investment strategy.  TALK TO AN EXPERT
5 types of mutual funds

5 types of mutual funds

Investing in mutual funds for your child’s education is always advisable. First of all, it is a less stressful option than investing in direct equity stocks because that requires you to have in-depth knowledge of market trends and fluctuations. Secondly, with mutual funds, there are a variety of schemes you can opt for depending on a range of factors. These factors could include the time period for which you can invest before liquidating, the amount of money you can invest, the amount you require to secure the education fund, the level of risk you can take, and so on.  When it comes to building an education fund, here are the top 5 types of mutual funds you can choose from. 1. Large-cap mutual funds The defining characteristic of large-cap equity funds is the fact that these funds invest in the top 100 Indian companies that have the highest market value. Large-cap mutual funds can bring in impressive returns if you remain invested for a long period. If you are a person who wants to avoid taking very high risks with your investments and has decided to invest early for your child’s education, this is the way to go. The average returns rate has historically beaten that of Fixed Deposits and similar investment alternatives. SIP Mutual Fund Investment Read More 2. Mid-cap mutual funds Mid-cap funds invest in Indian companies that come in the next best 250 in terms of market value. These funds are for you if you are ready to take on a higher level of risk. Justifiably, the return rates also tend to get higher. One way to satiate the risk appetite of mid-cap equity funds is to let them season for at least 7-10 years. If your child is in primary or middle school, investing in such a scheme will generate a wholesome amount of wealth by the time they are ready to pursue a college education.   How to track Mutual Funds? Read More 3. Equity-linked saving schemes  Among the various perks of investing in mutual funds is the tax deduction benefit. Equity Linked Saving Schemes are devoted to enabling investors to save taxes, as the name also indicates.  The only catch here is that it has a compulsory lock-in period of at least 3 years. The aim here is to keep you invested longer to counter the risk level. If you can spare that amount of time, then ELSS is definitely a go-to. An added benefit is the historically high level of returns.   Mutual Funds to invest in Child Education Read More 4. Low-risk options  There is this whole myth surrounding mutual funds that they only come with a high-risk factor. On the contrary, a debt fund is also a kind of mutual fund that comes with low risk, so much so that it remains undisturbed by market fluctuations.  Debt funds are still a better option than Fixed Deposits because they can generate a higher percentage of returns. So, if you are not in favor of taking high risks, debt funds are a go-to.  5. Hybrid mutual funds  If you are confused about your investment options or even hesitant about risking too much, the answer to your problems is a hybrid mutual fund. This kind of fund is a mixture of equity as well as debt.  Hybrid mutual funds bring in the best of both worlds. They tend to generate good returns at low risk. FAQs What are the different types of mutual funds? Large-cap mutual funds Mid-cap mutual funds Equity-linked saving schemes Low-risk options Hybrid mutual funds Which type of MF is best? The best type of mutual fund is the Hybrid mutual fund. Which MF gives the highest return? Equity-linked mutual funds are considered the mutual funds with the highest returns. Conclusion There will be miscellaneous financial goals you will be required to set if you are a family person. One among these might be to straighten up the roadmap to your child’s academic and career aspirations. The first step is calculating your expected expenses with the help of an education cost calculator. The calculator will help you draw your investment map to fulfill your child's aspirations. The earlier you invest, the more prepared you will be to make critical decisions as the moment arrives. DisclaimerMutual funds are subject to market risks. The previous performance of a fund is no guarantee of future success. Please reach out to an expert to know more about the schemes before investing.
5 ways you can save up for your child’s education

5 ways you can save up for your child’s education

In this blog, we will explore the best ways to save for your child's education! Education in India is viewed as a stepping stone to a good future. ‍The race to get children into the best colleges is so keenly fought that every Indian parent can qualify for a role of an expert counselor. The “padhai karo, nahi tho achchi Naukri kaise lagegi” line is so often heard that it could very well replace the “so jao, varna gabbar aa jayega” line. ‍The belief that a good education will provide for a good life, is entrenched in the way we think. Indian parents are willing to go to lengths to provide their children with the best education and are ready to spend as much as it takes. Many parents start saving when their child is very young, to prepare for future college-related expenses. ‍In this blog, we will look at 5 avenues where Indian parents can consider investing their hard-earned money. 5 Best ways to save for your child's education Your child's education does not deserve to be compromised and here are some ways in which you can plan ahead and start taking small steps toward your child's college fund. ‍Let's get started. ‍1. Investing in Mutual Funds We're sure you have heard of the phrase 'mutual funds' Sahi hai! And when it comes to saving up for long-term investments, mutual funds definitely Sahi hai! ‍Investing in mutual funds as a way to build a corpus fund for a particular goal has gained a lot of interest in the past decade or so. Building a retirement fund or a home purchase fund is very common and a small percentage of investors are also parents keen on saving up for their child’s education. Investing in mutual funds is viewed as a potentially high-return investment with the risk involved since the returns on mutual funds are market-related. Markets have been extremely volatile in the recent past, but mutual funds should still form a large part of an education fund, considering the longer time horizon involved. It is possible to invest as per your risk preference and redemption is far easier when you need the money. With Systematic Investment Plans (SIPs) that give you the option of investing monthly, there is a possibility of better returns compared to one-time/lumpsum investment mutual funds, especially over longer investment periods.   INVEST IN MUTUAL FUNDS 2. Exchange Traded Funds (ETFs) ‍For those of you who are unfamiliar with the concept of ETF, it is basically a basket of securities that is traded on an exchange. They are similar to mutual funds. ‍Investing in ETFs can prove to be a successful investment option when saving up for your child's education. The reason is, that you will be investing your money in dollars, therefore, if your child aspires to pursue his/ her education abroad, the dollar holds more value than many other currencies. INVEST IN ETFs 3. Buying Insurance Plans Buying an insurance plan to provide income security to your child is also an option. Many of these so-called child plans provide insurance cover and also market-linked returns after a fixed tenure. ‍However, returns on these plans have been volatile and impacted by frequent regulatory changes. Also, child insurance policies may not be the best investment option, because they are bound by various terms and conditions. 4. Buying Real-Estate Yes, this holds true for parents trying to save up for their children even today. Real Estate is considered by many, to be a good long-term investment. Since the time horizon that parents should consider is 15-20 years, real estate investments are good to maintain a diversified portfolio. But, real estate has lost its sheen as an attractive investment option over the past decade or so, due to excess inventory and regulatory impacts. ‍There are a number of hassles when investing in real estate. Other than the declining returns – unreliable deals, possible legal tangles, and a high wait time when one wants to sell are some of the factors to consider if this is an investment option for you. 5. Investing in PPF In India, the Public Provident Fund, or PPF is the go-to option for many parents when investing in their child’s future. It is a low-risk option that is exempt from tax on the withdrawal. The returns are lower but predictable. However, there is a limit to the amount of money one can invest through this route – the upper limit is Rs. 1,50,000, annually. PPFs are also less suited when an investor is ready to take more risk and willing to invest in market-linked funds. FAQs How can we save for children's education? Ans. Investing in mutual funds, exchange-traded funds, buying insurance plans, buying real estate, investing in PPF.  What is a good educational plan? A solid educational plan will give your family and you a road map for your future educational and professional objectives. Although parents and kids are free to start as early as they'd like, planning for college and technical training at the middle school level is not too early.  What is the best savings plan for a child? Ans. Sukanya Samriddhi Scheme, Make Investments in Gold, Invest in Equity Mutual Funds, Investments via Recurring Deposits.   Why save for your child's education? Ans. You can avoid taking on significant debt to pay for your child's higher education by starting a savings plan early, even before they enter kindergarten.  What is the right time to start saving for your child's education? The right to start saving for your child's education is as early as possible. The earlier you begin, the better it will be for your investments, as you'll be able to take advantage of the power of compounding. Conclusion We hope now you have a decent idea of what investment options you could consider, as well as the pros and cons of each. In our next post, we will look at why we think mutual funds - through SIP mode - are a good way to build a corpus fund with the goal of educating your child. With this kind of education fund, you can stop worrying about the finances that are required to send your child to the college of her dreams. ‍Your investment today will gift your child a good life, tomorrow. Consult an expert advisor to get the right plan TALK TO AN EXPERT
whatsapp