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A beginner's guide to education inflation is a stepping stone in saving and investing for your child's education. With children come specific and inescapable responsibilities. It starts with providing your child with a safe home, loving and nurturing space, and quality education to help them grow and become their better selves. Yet all these needs come at a high cost.  The average inflation rate across sectors is rocketing beyond belief and has bypassed the rate of household inflation. From basic needs to luxury, the average cost of different items has increased manifold.   College is a lifetime experience; it offers quality education, changes one’s mindset, and opens up a vast network of opportunities. Generally, the chance to better oneself is why Indian parents and students work hard to get into some of the world's most significant educational institutions, not just India. Yet, this access to quality education comes at a great price. Consider the example of IITs in India; despite the devastating pandemic, the tuition fees for undergraduate courses jumped from Rs. 90,000 to 2 lakhs! Similarly, top universities in the USA in 2022, announced tuition fee hikes while Canada increased its international tuition fees by nearly 5% annually across all provinces.  The increase in tuition fees and other consequential education expenses results from inflation; Education inflation is a real threat to your savings. The hard truth is that it will rise even higher in the years to come.  It has become imperative for parents to understand how Education inflation can affect their savings. And why it is essential to protect their savings via investment.  Before we talk more about why parents should be protecting their savings from Education Inflation, let us look at some of the factors responsible for the rise in education costs.  https://www.youtube.com/watch?v=F9WG4-C_1Jk YouTube: EduFund Factors responsible for the rise 1. The rising cost of amenities The tuition fees don’t comprise the entire cost of education. It is also the amenities that come along with it. Food, accommodation, extracurricular, commutation, and other living expenses contribute significantly to the cost of education.  2. The rise in the number of educators With more universities and the expansion of different courses, the demand for educators has increased as well. And this contributes notably to the overall cost of education.  3. Increased demand for higher education Higher education has upgraded to be a necessity from the space of mere desire. A University degree is a means to financial success and prestige in the modern world.  4. Lower public funding The public sector's investment in the field of higher education is much lower than the other segments. Universities rely on tuition fees as their primary source of income which means that the burden of the cost falls on the shoulders of parents and guardians. While you cannot control this financial phenomenon, you can strive to understand why you need to protect your savings from it.  https://www.youtube.com/shorts/jPHG8h87Dzo YouTube: EduFund Why do parents need to protect their savings from Education inflation? 1. Preserve your purchasing power The value of money depreciates with time. Even though you might earn some extra currency over time, the real value matters the value of the Indian rupee depreciating against the dollar and pound over the years. And you need to check whether you’ll be able to retain your present purchasing power after a certain number of years.  Consider ensuring that your return on savings is higher than the rate at which the value of money depreciates. The consistently soaring education Inflation is one of the significant factors affecting such depreciation. 2. Shield your child’s future  With a world full of information and opportunities, your child should be free to dream about their future. And to make this happen, it is essential to shield their future against all the odds. With proper planning and strategic allocation of your funds, it is possible to compete with the rising cost of education.  3. Maintain your standard of living  To lead a happy and healthy life, look at the practical aspects of things. Your savings must consider your living standard. Your funds should be able to balance between needs and wants.  4. Make harmony with your retirement plans You are to retire and there is no denying that. Are you willing to work this hard all your life? or, would you like to grow old sipping your coffee and relaxing while watching the rain? Life has its phases and you need to enjoy them the way they are meant to be enjoyed.  While taking the cost of your child’s higher education into account, it is so important to take your retirement into consideration. 5. Take your health into account Physical and mental health are pertinent to your well-being and your family’s bright future. A financially secure plan can protect you from avoidable stress, and various lifestyle diseases and prepare you for certain unavoidable medical expenses.  Only when you are healthy will you be able to enjoy the money you are saving. Thus, your health is another reason to protect your savings from Education inflation.  Education inflation is rising at 10-12% in India which makes protecting your savings essential to retain your purchasing power in the future. Give your child the future they deserve by keeping up with the times and saving in advance. How to build an education corpus?   1. Calculate the total cost  Plan the total cost to get an approximate amount that you need to save. Setting the target will create a goal and make the journey easy. The education cost varies from course to course so take the help of professional experts to chart an education corpus plan.    A unique college cost calculator can do wonders for parents. The College Cost Calculator on the Edufund app takes into account various factors and calculates the future cost of college, which makes it easy for parents to set a goal.   2. Start investing as early as possible  Parents who can start saving and investing early manage to create a substantial amount of education corpus. The longer time you have in your hands, the more interest you can accumulate.   3. Choose the right investment tools Know your investment options and invest in the right funds to get maximum returns. The financial plan must include the right methods and investment vehicles to accumulate funds. Savings accounts with 3% to 4% per year and FDs with 5% to 7% per year are safe and secure ways to save. Traditional life insurance policies offer 5% – 6% interest per year.    Invest in equities at the beginning as they yield inflation-beating returns in the long run. Investors prefer SIPs in mutual funds for wealth creation. Scroll through the Edufund app to know your savings option as it provides access to 4000+ direct mutual funds, SIPs as low as INR 100, US stocks and ETFs, ELSS funds, and digital gold.   4. Protect your investment Aggressive investments will accumulate the desired funds, but it is vital to protect the investment from eroding because of adverse market conditions.   Remember the reason why you need an education corpus and shift the corpus to debt instruments as the goal nears to keep it safe and secure.    Start withdrawing two to three years before you will need the money and then shift it to bank fixed deposits or debt funds, as it will give fixed and safe returns.   5. Track your investment   Keep track of the investments regularly and finetune them based on the need of the hour. Creating a plan is easy but sticking to it is a bit difficult. Don’t divert funds for non-essential needs, as building an education corpus is vital for the child’s future.   Education inflation over the years and in the future Here is a look at the cost of popular courses in the past and the expected costs of the courses in the future. These costs are for one year of college.  Course Cost in 2015 2020 Expected cost in 2025 Expected cost in 2030 Engineering 145000 171374 202545 239386 Hotel Management 77000 98200 128205 159636 MBBS 800000 1000000 1250000 1562500 MBA 1140000 1586000 2206126 3068721  FAQs Why education is becoming expensive:   There are many factors responsible for the rising cost of education. A few factors could be- the rising cost of amenities, the rise in the number of educators, the increased demand for higher education and lower public funding.   How do you calculate the future cost of education?   There is a formula to calculate the future cost of education. It is calculated with the formula Future value = Present value (Expected returns + Rate of interest)  What is the rate of inflation for college?   The cost of education has been increasing by 10% every year in India. Between 2012 and 2020, the cost of education rose in the range of 10- 12% every year.   How does inflation affect students?   As education costs go up, it becomes increasingly tough for students to get into their dream universities. This further affects their employment prospect.   TALK TO AN EXPERT

The benefits of long-term goals are that it helps individuals to realize their dreams over time. Sometimes you need to prioritize and work things out. Setting long-term goals gives people the opportunity to achieve desired results eventually. What are long term goals? Long-term goals are the desires, visions, or ambitions that people know will take some time to achieve. These goals are generally accomplished in the future. The timeline varies from a few years to several years as the long-term goals cannot be achieved in a day, month, or even one year.  Long-term goals can be professional or personal goals like a young man of 20 wanting to become a manager at the age of 30, marrying and settling down by the age of 35, taking a break and traveling for six months by the age of 40, setting up an education corpus for a child or planning the retirement fund. Benefits of long term goals 1. Gives direction Without long-term goals, individuals will only think about the present and not think about the future, which as everyone knows is quite unpredictable. Suppose an individual is earning INR 40,000 per month and does not have any long-term goals. He will then spend most of his salary without worrying about future consequences. What happens if he suddenly falls ill or he requires a lump sum amount in the future? Long-term goals give direction, help people to think ahead, and make provisions accordingly hence they are beneficial in both personal and professional life.  2. Key to changing your life Long-term goals act as a key to changing your life. Every person has a vision for a bright future. The benefit of long-term goals is that it works as the inspiration behind the goals that motivate and urge to make dreams a reality. Once the goals are set people often are encouraged to reach the end of the road by any means. They are no longer afraid of the difficulties in their path instead are driven to reach their goals.  3. Motivational tools  A long-term goal is an important motivational tool that gives the individual a focus point. When you have set a long-term goal then you have a target to achieve and it becomes easy to work for and towards it with complete dedication and determination.  4. Increases self-confidence Long-term goals inspire a better future and help you to see what you want and what you can achieve in the long run. Measurable and specific long-term goals encourage a positive mindset, help to avoid procrastination, and increase productivity. All these factors at the end of the day boost the self-confidence of a person.  5. Gives purpose to everyday actions Setting up goals is not an easy task nor is moving towards it with complete dedication but once you set up long-term goals they can persuade a person towards his end goal. Long-term goals give purpose to everyday actions and urge an individual to move forward even if the daily activities seem boring.  6. Encourages organized behavior Breaking your goals into medium, short and long-term goals encourages organized behavior. It shows that the individual is capable of handling complex processes and prioritizing his objectives. Long-term goals look scary at the beginning but with time it has the power to transform your way of thinking. Individuals who set up long-term goals are seen to be more organized in their behavior and actions than people without any goals in their lives.  7. Take advantage of the full potential Setting goals requires proper planning and when a person tries to set long-term goals he has to utilize his full potential. He will have to find out his actual objective and research the best available means to reach the desired goals.  8. Helps in self-improvement One of the important benefits of long-term goals is that it helps in self-improvement. People who set up these goals have to maintain their focus if they want to achieve such goals. Long-term goals shape the direction of the thinking process and encourage people to move toward it diligently. It keeps on reminding you that you have done the hard work and only a little work remains. The scope for self-improvement is immense as you have to improve your habits and move towards the goal somehow or the other to achieve them at any cost.  9. Achieve success Long-term goals give people the time to align the necessary resources with the objectives in an effective manner. It keeps you accountable, ensures better handling, and ultimately increases the chances of success.  INVEST NOW Conclusion The benefits of long-term goals are that it gives individuals the time to get a grasp on things and achieve them at a steady pace. There is no need to overwork yourself instead people have the time to set a comfortable pace that is also achievable. Consult an expert advisor to get the right plan TALK TO AN EXPERT

Which is the better investment option for a daughter -  MFs or girl-child schemes?  Indian parents are often on the lookout for the right kind of investment schemes that will lessen the financial burden of education and marriage expenses of their girl child. They want to safeguard their child’s future and hence try to create a financial corpus as security for the days to come.  Before entering into a discussion about MF vs Girl Child Schemes, let us know about each of them in brief. What is Mutual Fund or MF? Mutual Fund refers to investment vehicles that accumulate money from several investors for buying a portfolio of various securities. The portfolio includes several options like real estate, bonds, stocks, or a combination of different investments.  Investing in mutual funds is considered beneficial in recent times because of the high returns on investment. The most common drawback of a mutual fund is the high fees of the investor but this can be mitigated by choosing the right investor.  You can take the help of the EduFund App to reduce excessive charges with the help of saving experts.  What are Girl Child Schemes? Girl child schemes are investment plans that offer benefits to the girl child. These are divided into two categories: State Government Schemes and Central Government Schemes. Some of the highly popular ones are Sukanya Samriddhi Yojana, West Bengal Kanyashree Prakalpa, and Dhanlalakshmi Scheme.   The girl-child investment plans help parents to accumulate money so that it can later meet the financial requirements of the girl child. Mutual fund vs Girl child schemes Both Mutual funds and Girl Child Schemes serve the same purpose and that is to act as investment vehicles. Parents often take the help of either of these or both to create an appropriate portfolio that will be able to meet the desired needs of their girl child.  Let us make comparisons and also see the difference between the two based on certain parameters. 1. Interest rates Both schemes offer higher interest rates that lead to more savings. Girl child schemes generally offer a return of 7% to 8.6% whereas mutual funds offer returns of 12% to 14% easily in the long run.  2. Saving on taxes Gains on equity funds, LTCG, ELSS, and dividends received on mutual funds can be claimed as tax-exempt as mutual fund investments up to INR1.5 lakh per annum are under tax deduction. All the girl child schemes are exempted from tax to benefit the girl child. 3. Low minimum investment  Both schemes have the option of low minimum investment. Some investors have waived the minimums and individuals can now invest as low as $1 or INR 100. There is already a fixed minimum value for a girl child scheme be it INR 200 0r INR 500 or INR 1000 and investors have to start with that amount only.  The Edufund App gives its investors the option of starting mutual fund schemes or SIP at INR 100 only.  4. Terms and conditions The terms and conditions of the girl child schemes are straightforward with no room for any assumption. Mutual fund schemes are subject to market change and should be read properly by investors.  5. Limitation of amount The minimum and maximum amount of investment in girl child schemes are pre-decided and you cannot go above or below the said amount. Mutual funds on the other hand give the option of deciding the minimum and maximum amount by yourself as per your ability.  6. Flexibility Girl child schemes do not offer any flexibility whereas investors can choose from a broad spectrum of mutual funds schemes.  7. Premium In several girl-child schemes, the premium is waived off in case the policyholder dies prematurely, whereas that is not the case with a mutual fund. 8. Safe and secure Although mutual funds are considered safe investments with greater returns, in the long run, girl-child schemes are a better option for conservative investors who are more concerned with the safety of their investments than high returns.  9. Partial Withdrawals Several girl child schemes allow investors to withdraw partially after a specific period but mutual funds schemes have a specific lock-in period and cannot be withdrawn partially.  Conclusion In the discussion between MF vs Girl Child Schemes, both the schemes are meant to benefit the investor at the end of the day. If the investor is ready to take a certain amount of risk with their investment then they can create a financial corpus of a good amount through mutual funds. But, if they are looking for a safe investment vehicle then girl-child schemes are the best option. Consult an expert advisor to get the right plan TALK TO AN EXPERT

Beginners are often torn between Direct vs. regular Mutual Funds. Every mutual fund is available to investors in two versions – Direct and Regular. Regular plans involve an intermediary who manages the investments on behalf of the investor, whereas, in the direct plan, the investor directly deals with the AMC (as shown in the figure). These versions are only the options available to the investor in the market that are offered by the same fund. The invested amount from both options is managed by the same fund manager and has the same allocation of the assets in the fund’s portfolio Only the road taken by the flow of money from an investor to the AMC is a different one. Direct mutual funds vs Regular mutual funds Here are the main differences between direct vs regular mutual funds 1. Direct Mutual Fund Direct Plan is directly offered into the market by the AMC (Asset Management Company) or the fund house. The investor can perform his/her own research based on their risk appetite, time horizon, and goals and then make a choice based on these parameters. There is no distributor or intermediary involved, hence reducing the expense ratio (management fees charged by the fund house to the investors). These plans can be easily identified as they are prefixed with the word “Direct” as a part of their name. The investors can choose an offline or an online mode to buy units of the fund. Investors who can perform their research, and who also have the time and capability to manage their portfolio, prefer these plans. 2. Regular mutual fund Regular Plans involve an intermediary and the investors invest through these distributors into the fund offered by the AMC. The intermediaries charge a commission or fee for their services to the fund house. This fee is charged to the investor as a part of the expense ratio, hence the net fee when compared to direct mutual funds. Due to the higher expense ratio, the returns tend to be lower than the direct plan counterparts. These plans provide convenience and are preferred by investors who have less knowledge about the markets. Parameter of differenceDirect Mutual Fund PlanRegular Mutual Fund Plan Expense RatioLowerHigherNAVHigher than RegularLowerReturnsHigherLowerIntermediaryAbsentPresentFinancial/Investment AdviceNoneAvailable and provided by the advisorResearch on where to investSelf – To be done by the investorProvided by advisor Why are Direct plans better? 1. Lower expense ratio  Did you know that you pay for the financial advice that the distributor gives you? The intermediaries charge it to the fund house as a commission. However, this commission paid to the advisor is charged as a part of the expense ratio to the investor. Hence, the investor indirectly pays the intermediary. The fee which is deducted for the advisor varies from 0.5% to 1%. In the case of a direct mutual fund, there is no intermediary, hence there are no distribution charges or commissions to be paid, resulting in a lower expense ratio. Over a longer horizon, the small % of fees paid out of your pocket makes a large difference to the final corpus that is accumulated.  Consider the Axis Bluechip fund which has earned the following returns over the last 5 years and has beaten its benchmark (Nifty 50 TRI). Consider two scenarios where the investor invests Rs 10 lakh into this fund through a Direct plan in one case and in a regular plan in the other. However, the small difference of 1.44% leads to a large change of Rs 1.36 lakhs to the final wealth that is accumulated. (Data of returns are from AMFI website) ParametersDirectRegularDifference5-year returns18%16.56%1.44%Initial Invested Amount10,00,00010,00,0000Final Corpus accumulated  22,87,758   21,51,531     1,36,226  2. Higher Returns The returns from a direct plan are always higher than the returns from the regular plan, owing to the higher expense ratio. Returns being one of the most important factors for cherry-picking the fund of your choice, this difference should be taken into consideration. Some of the examples of the funds are as follows: (Data of returns are from AMFI website) 5-year returnsDirectRegularAxis Bluechip Fund18%16.56%Aditya Birla Sun Life Mid Cap Fund 12.56%11.53%Axis Small Cap Fund19.70%18.17% 3. Higher NAV Net Asset Value or NAV = Assets of the fund - Liabilities of the fund / Number of units of the fund The assets owned by the fund include equity or stocks invested by the fund, debt instruments such as debentures or government securities, and cash. The liabilities of the fund include money owed to banks, fees to distributors or other associated entities, etc. In the case of the direct plan, due to the absence of the fees, the Net Assets (Assets – Liabilities) are higher resulting in a higher NAV. Whereas in the regular plan, the fees/commission to the distributor or intermediary forms a part of the liabilities, reducing the NAV. A higher NAV would imply a higher investment value. Differences between Direct and Regular Plans  The key difference between direct and regular mutual funds:  Net Asset Value (NAV): The key difference between direct and regular mutual funds is NAV. The NAV of a direct plan is higher than the regular plans. This means that the value of your investment is more in a direct plan than in a regular plan. Returns: Returns are likely to be higher in direct plans over regular plans. This is because regular plans charge a fee for the advisory role and that can affect your overall investment value.   Role of financial advisor: Direct plans do not offer financial advisory services or expertise. You are required to research by yourself, determine the best fund, and time the market to understand the best time of investment and exit. All these decisions and market research is taken care of by professionals with regular funds. These are regularly monitored and adjusted to help fetch the best returns in the market.   Direct Plan – Mutual Fund Regular Plan – Mutual Fund Higher Returns Low Returns Low expense ratio High expense ratio NAV- High NAV - Low Self-Researched & Monitored Researched & Monitored by Advisor Advice is not provided Advisory services provided by experts SIP/Lumpsum available SIP/Lumpsum available   FAQs Which is better direct or regular mutual fund? Direct mutual funds offer higher returns in the long run to investors. However, investing in mutual funds requires market research and financial expertise which is offered by a regular plan. Both are good investments and benefits are likely to vary based on the investor and their choices. What is the difference between direct and regular mutual funds? In regular mutual funds, AMCs are required to pay a commission to the brokerage. This is not the case under a direct mutual fund. Direct funds have lesser costs involved, a higher NAV, and are do-it-yourself funds where the investor must make investment decisions on their own. Why Invest in a Regular Plan of a Mutual Fund? The biggest benefit of a regular plan in mutual funds is the financial advice offered by the Fund house. This can have a huge impact on your returns and you can get closer to your financial goals more efficiently. Conclusion In conclusion, apart from the above benefits, one is always in control of their investments and is also well informed about the turbulences in their portfolios and aids in taking an active approach towards the financial goals. A tiny % of difference can multiply into a larger difference in the final returns from your portfolio. One can learn about the AMC, the mutual fund options available that suit your risk profile from the services offered by wealth management sites such as EduFund, with a minimal fee, when compared to the expense ratios of a regular plan. The next time that you plan on investing in a mutual fund, go for a direct plan. It will surely involve some initial research and some preliminary work, but you will be able to reap long-term benefits from making this wise choice.

Education Gap An education gap is frequently a fruitful one-year break from academics taken by a person to pursue interests that are typically unrelated to their daily life or line of work. The phrase "gap year" refers to students who take a year or fewer away from their regular academics, generally between high school and university. Some students may take a gap year before beginning the last part of their secondary school, or even shortly after finishing university, to better equip themselves for the job market. Simply put, a gap year can be taken across life phases, such as between high school and university, after university and before the formal job, or while changing careers or retiring later in life. Why should students take an education gap year? There are various reasons why your child would consider taking a gap year. Students typically see it as a chance to obtain personal or professional experience, attain specific goals, and/or pursue personal interests. If your child is thinking of taking a gap year, you should examine if it's the best option for them and what they could learn from it.  If they're considering a university course or a professional position, they'll need to demonstrate that their year was not just enjoyable but also valuable and significant. So, while arranging a gap year, consider how different hobbies can help them grow personally and intellectually. It should assist children in obtaining a better awareness of the world and building initiative, maturity, dedication, and individualism outside of formal schooling. Types of Gap Year  The intent of a gap year defines its type. Some students opt for a gap year because they want to pursue an academic course while some want to travel.   There's always a reason to opt for a gap year. Here are different types of gap years based on the reason.   1. Studying Gap Year  A studying gap year is when your child decides to take a gap year before starting college/ university. There are programs or universities that have very competitive acceptance rates. Taking a gap year and updating their resume by doing summer courses or working with an organization helps increase their chances at their dream college.   2. Traveling Gap Year  Many students decide to travel either within the same country or to others. Taking a break every now and then to relax and to meet new people helps them think better. Taking a traveling gap year might help them discover what their true passion is and then they can apply to a university accordingly.   3. Volunteering Gap Year  There are many NGOs and government organizations serving a great purpose to society. Sometimes, taking a year off of their education and volunteering for a great social cause can help increase their sense of community. And later on, if they decide to apply to study abroad, volunteering would be a plus for their application.   4. Working Gap Year  The employment world can be very different from what a student thinks it is. Taking a gap year to work either to gain experience and skills, earn money, or build a professional network is always a good idea.   Reasons for a gap in education Here are some reasons why you need to take an education gap! 1. Increase their outlook and perspective Taking a gap year may be a terrific chance for your child to engage in another nation, whether they just want to visit and experience another place or build an understanding and knowledge of global concerns. 2. Acquire necessary work experience and skills Working during their deferred year allows them to obtain significant experience, skills, and information, which may be helpful when looking for employment later. Students might also apply this information in vocation-related degree programs like nursing, law, or veterinary science. 3. Make some money Following that, a working year off before attending university might be a fantastic chance to make some additional money. They may not earn enough to cover all of their university expenditures. Still, they may be able to cover expenses such as housing, study materials, transport, or perhaps the first academic session of their college fees. 4. Make beneficial contacts During their deferred year, they will most likely encounter individuals from many walks of life. This may include people you can contact for career chances and references, or just overseas pals who can be visited if you have the opportunity to travel to their home nation later.  5. Make foreign contacts Staying and working alongside locals during a gap year allows children to get to know them better, helping them to gain a more comprehensive awareness of diverse cultures and viewpoints. They'll meet all kinds of individuals; if they click with them, they could become lasting friends. Funds for an education gap An Education Gap can be expensive. Transport costs, living costs, visas/work permits, driving licenses, health coverage, mobile and internet expenses, system costs, equipment including a thorough first aid pack, hospital, pharmaceutical, or expenditure on health, and possibly passport renewals are all included. Many companies provide beginning packages to assist children settling into their new country. This includes setting up a bank account, health coverage, lodging, transportation from the airport, and even helping them in finding work when they arrive. They frequently include specifics on everything a child will need to accomplish both before and after they come, which may be a helpful resource when budgeting overall spending. Features of the Education Gap One of the severe aspects of the education gap is its tendency to compound over time and grow more powerful and pronounced, increasing the likelihood that a student may underperform academically and socially or quit out. Furthermore, suppose kids do not gain core academic abilities such as learning, arithmetic, and computing, as well as interpersonal and social skills. In that case, it could be more challenging for them to master this core knowledge later in their schooling. Remediating learning gaps becomes increasingly challenging as children continue through their schooling, either because they have fallen far behind their peers or because high school teachers lack specialized training or the ability to teach core academic abilities. Many educators, school reformers, academics, and policymakers have argued for increased investments in preschool education, particularly accessibility to prekindergarten programs, for these and other reasons. Conclusion Without appearing overly tragic or pessimistic, and with a clear vision and focus on the positive road forward, the reason for an educational gap should be well-backed by statistics. When illustrating the significance of a specific break to life goals, it is crucial to be forthright and honest. Primary reasons to choose an education gap include: Learning life skills. Financial management. Obtaining work experience. Planning forward and giving the future some thought. FAQs Is an education gap year going to affect my child’s chances at top universities? As long as your child is utilizing the gap year the most by either pursuing some short-term course, volunteering, gaining professional experience, etc. It will not affect their chances at top universities.   What kind of work can my child do during a gap year? Your child can take up jobs like a tutor, office administrator, market research, catering, and hospitality, etc.   Are there any disadvantages to taking a gap year?  Although there are many benefits of taking a gap year, there could be some disadvantages as well. For eg. your child would be a year behind their peers and classmates. The gap year may cost you a lot of money if your child decides to take up an expensive summer course.  TALK TO AN EXPERT

Getting into one of the best film schools in the world is no joke. But once you get through, you can expect future rewards of fame and recognition in the movie industry. Choosing the best school for you is a task that you cannot afford to take lightly because you have to consider not only the school's international ranking but also its faculty, departments, courses, and the practical equipment available. Another critical factor is the tuition fee and the cost of living, particularly in the case of global education. Choose a school that will set you up for a career with great returns because film studies courses are anything but cheap. Here is a list. Best Film Schools in the World 1. USC School of Cinematic Arts, USA Located in Los Angeles, USC or the University of South California School of Cinematic Arts is unanimously considered the best in the country, funded by the likes of George Lucas. With its million-dollar funds, it can afford to provide students and research scholars with luxury amenities like an IMAX theatre and labs. USC School of Cinematic Arts is also one of the oldest. It was founded in 1929 along with the Academy of Motion Picture Arts and Sciences.  The School has many divisions including Cinema & Media Studies, Film & Television Production, John Wells Division of Writing for Screen & Television, John C. Hench Division of Animation and Digital Arts, Interactive Media & Games, Media Arts and Practice, and Peter Stark Producing Program. It offers a range of courses in film studies including BA, BFA, and MFA. Various renowned film directors, cinematographers, animators, producers, researchers, and so on, form the alumni of this film school.  2. National Film and Television School, UK National Film and Television School, popularly known as NFTS, has been ranked as UK’s best for many years. Despite being located on the outskirts of Northwestern London, NFTS is quite famous amongst film scholars. It was established in 1971 and stands out amongst the film schools in the UK because of its amazing curriculum.  The well-known American e-mag The Hollywood Reporter has listed NFTS among the best international film schools in the world in 2021. Among the alumni of NFTS is David Yates, the director of the Harry Potter movies. Other than offering a good number of specialized PG courses, it also offers diploma and certificate courses.   3. American Film Institute, USA American Film Institute is undoubtedly the best one in all of LA and definitely one of the top 5 film schools in the world. If you are aspiring to attend the coolest film school in the world, AFI is the answer to your prayers. It offers you the opportunity to produce your own short projects during your course. If these works are extraordinarily good, you also get the opportunity to meet legends like Steve McQueen for personal training in the art of filmmaking.   AFI was established as a film organization in 1965 to train budding American filmmakers in motion picture arts and runs on private funding. David Lynch, who is known for his critically acclaimed works, also has a special inclination toward this film school. 4. Beijing Film Academy, China  Beijing Film Academy or BFA is the most sought-after film school in all of Asia. BFA started a small institution called the Performance Art Institution of the Film Bureau of the Ministry of Culture in 1950. But by 1956, the name was changed to Beijing Film Academy. Currently, it is one of the largest film schools in the world. Film Industries are witnessing exponential growth in Asia and this makes BFA a great choice. Also, personalities like James Cameron have been part of it as visiting fellows. The curriculum is vast with Bachelor’s, Master and associate courses in various areas like film theory, directing, producing, acting, animation art, cinematography, sound art, and scriptwriting among others.  5. La Fémis, France La Fémis connects one to the rich history of filmmaking which began with the Lumiere brothers in 1894. This French institution is based in Paris on the very site of the Pathé studios which is where filmmaking itself originated.  La Fémis has produced famous filmmakers in the past who have made history at the Cannes Film Festival, Berlin International Film Festival as well and Venice Film Festival. It even precedes the Tisch School of the Arts of New York City and China’s BFA in being one of the most rewarded schools worldwide. The main curriculum is a self-designed 4-year course based on a fine balance of theory and praxis.  Best Film Schools in India Film and Television Institute of India, Pune   Satyajit Ray Film and Television Institute, Kolkata   National Institute of Design, Ahmedabad   Whistling Woods International, Mumbai   Ramesh Sippy Academy of Cinema and Entertainment, Mumbai   Asian Academy of Film and Television   LV Prasad Film and TV Academy, Chennai   Centre for Research in Art of Film and Television (CRAFT), Delhi   The ICE Institute   KR Narayanan National Institute of Visual Science and Arts   Kalapurnam Institute of Visual Effects and Animation    Best Film Schools in Europe London Film School   National Film and Television School   Academy of Performing Arts’ Film and TV School   La Femis   Lodz Film School   London Metropolitan University Sir’s John CASS Faculty of Art, Architecture and Design   University of Television and Film Munich   National Film School, Italy   National Film School of Denmark   Norwegian Film School   Screen Academy Scotland   University of the Arts London’s College of Communication   Russian State University of Cinematography   FAQs Which is the best film school in the world?   The Los Angeles Film School, California   Toronto Film School   Vancouver Film School   London Film School   Academy of Performing Arts Film and TV School   La Femis   Lodz Film School   Beijing Film Academy   Which is the hardest film school to get into?   One of the hardest film schools to get into is the University of Southern California’s School of Cinematic Arts. Only 3% of applicants are admitted to the School of Cinematic Arts.   Which college has the best film school?   American Film Institute   California Institute of the Arts   Chapman University   Columbia University    Emerson College   Loyola Marymount University   New York University   University of California, Los Angeles   Which country has the best film schools in the world?   The United Kingdom tops the list as it has some of the best film schools in the world. Reputed universities and award-winning alumni from the best universities in the UK make it a most sought-after destination for film studies.   Conclusion Preparing to get admission to one of the best film schools in the world can feel like a full-time job in itself. Knowing the basics about these schools is a good start to that journey. Once you are aware of what you are signing up for, you can attain more determination and tenacity for realizing your dreams. Consult an expert advisor to get the right plan TALK TO AN EXPERT

Mutual fund companies offer flexibility to invest in their schemes through SIP (Systematic Investment Plan). While some choose the date of SIP based on their salary credit, others may try to time the market by selecting specific dates based on different factors one may choose to invest at the end of the end because of the high volatility and F&O expiry of the month-end contract. So, is there a best date for SIP investment? In this blog, we’ll see whether the date of SIP will make a huge difference or not. Read on!! We have analyzed the data of the past ten years, from Jan’11 to Sep’22, of BSE Sensex based on daily returns to understand it in a better way. Note: When there is a holiday, the date of the previous/next working day has been considered.Source: BSE, EduFund Research Team The above calculation shows that there is hardly a marginal difference in returns based on the period under observation. So, there is no strong relationship between the SIP date you choose and the returns. Any date will work if you are investing through SIP. Experts suggest that one should never try to time the market; instead, remain invested with discipline over a longer period to get the most benefit of compounding. SIPs are designed to deal with the volatility in the market. SIP helps your investments to average out the cost of buying, which is called rupee cost averaging. This helps investors to buy mutual fund units at lower prices and higher, which averages out the cost of buying the units. What is Compounding? Compounding works as a multiplier in your investment. You not only get the returns on the invested amount but also get the returns that keep getting added back to your invested amount. In short, earning returns on principal & returns as well. The best thing about compounding is that at one point your amount of returns will be more than your invested amount. What is the rupee-averaging cost? In this concept, a fixed amount is invested at regular intervals. This allows you to buy more units of a mutual fund when prices are low and fewer units when prices are high. Over the period, this averages out the cost of buying. Timing the market is challenging. The market goes through different phases, and you never know when the market is going to rise or fall. So, disciplined investing will help you to accumulate wealth over the period. When we try to time the market, we invest with emotions which can lead to wrong decisions. SIP helps to ignore all these factors and helps to invest regularly. Conclusion SIP can do wonders with your investments if you do discipline and regular investing over a longer period without thinking of the date, by Just following the normal process. Consult an expert advisor to get the right plan TALK TO AN EXPERT

The Indian markets recovered and boomed in November 2021, followed by a sharp decline of 9-10% from January 2022 until June 2022. The fall continued, with the single most significant fall of 2.5% in September 2022. Investors have been cautious about what the D-street will offer them during Samvat 2079 Muhurat. Let us see how the market has performed for every Samvat Samvat se Samvat Tak - Nifty performance Note: According to the Hindu Calendar, the Vikram Samvat calendar is 56.7 years ahead of the solar Gregorian calendar. Hence, when the Gregorian is in 2022, it is the beginning of Vikram Samvat 2079, which will be post-Diwali next week Source: Economic Times, EduFund Research For global equities, Samvat 2078 turned out to be a challenging year, given headwinds including rate hikes, the energy crisis, the Russia-Ukraine conflict, continued supply disruptions, outflows from foreign investors, and heightened inflation.  What does the index indicate this Diwali?  India’s equity market is likely to outperform its global peers in the upcoming Hindu year of Samvat 2079. This will be on the back of improving corporate earnings. Cumulative profits of the top 500 companies as a percentage of the country’s gross domestic product (GDP) hit an 11-year high of 4.3 percent in 2021-22 (FY22). This has been a positive sign of revival after the massive destruction caused by COVID-19.  Corporate earnings to GDP ratio – an all-time high for India with a sharp rebound post-COVID.Note: According to the Hindu Calendar, the Vikram Samvat calendar is 56.7 years ahead of the solar Gregorian calendar. Thus, when we are in 2022, it is the beginning of Samvat 2079 which is after Diwali next week. Source: Economic Times, EduFund Research   Going by the GST and advance tax collections, for the second quarter of FY 2023, the aggregate revenue for the Nifty 50 companies is likely to witness a healthy double-digit growth of up to 20% year-on-year. This will be a massive improvement for the seventh quarter in a row and will be led by strong credit offtake. A revival in private capital expenditure due to stocking up of goods before the festive season.   Amid inflation concerns and higher input costs in India, some of the factors which have worked well for the Indian economy are healthy GST collections, the highest GDP growth in the Asian region, an above-normal monsoon, and strong earnings. These factors are likely to keep the economy in better shape when compared to other emerging economies, particularly at a time when there is a lot of uncertainty around the global market.   On the FII and DII movement, the market has seen a heavy withdrawal in 2022 particularly in Q1 and Q2 of CY 2022 due to non-competitive interest rates, geo-political issues, inability to beat inflation, and better return opportunities in other markets. However, the FIIs generally love pouring money during Muhurat trading due to its favorable market conditions and there have been signs of declining FII withdrawal from the Indian market in Q3. This is likely to provide the much-needed impetus to the Indian market.  How has the FII/DII participated in the market?  Note: Net Purchase / Sales of FII/DII in Cash Source: Moneycontrol How are the valuations?  With the recent correction in the market, and the improving earnings of India Inc. the valuation as defined by the P/E ratio has fallen in line with the long-term average for CY22. This makes the market more attractive from a long-term investor point of view. Note: Simple Average is taken for the yearly P/E ratio Source: Nifty PE Ratio, EduFund Research  Particularly for 2022 after April, the valuations have been becoming attractive owing to improving earnings and also correction in the market.  Note: Data for Nov and Dec 2022 is not available Source: Nifty PE Ratio, EduFund Research   What should you do?  The Indian markets have faced a significant hit and have performed the worst in September 2022 due to rising inflation and interest rate hikes. However, we believe any correction in the market is inevitable and should be used as an opportunity to acquire more units of investment to make the most of the opportunity.   The Indian benchmarks are currently trading at rich levels, and we have an optimistic view with regard to the Indian economy’s growth. This is primarily due to the reforms the government and the Central Bank are taking to beat the rising inflation and improve private capex. Additionally, we are bullish that several multinational companies have been moving their units from China to India, with Apple starting its facility in India.   Having said this, one cannot ignore the harsh reality of high inflation, declining currency value, and rising geopolitical issues with tensions between the US and North Korea and Russia and Ukraine. Also, with a high probability of another rate hike by the US Fed later this year and the depreciating rupee, Indian inflation is likely to stay high next year.   Thus, it would help if you focused on single names that perform well in a volatile environment and are undervalued, as highly valued stocks are less likely to perform during periods of inflation and high-interest rates. For investors who are less adaptable to a volatile environment, mutual funds work the best, particularly in the hybrid category with a dynamic asset allocation approach.  DisclaimerThe Content is for informational purposes only, you should not construe any such information or other material as legal, tax, investment, financial, or other advice. Nothing contained in this content constitutes a solicitation, recommendation, or endorsement. Please consult your advisor before investing. Mutual Funds are subject to risk, read the offer documents carefully before investing.

Equity vs Debt Funds which one is better is an ongoing discussion between investors who are interested in mutual funds as their investment vehicles. Although both these funds are good investment schemes each of them behaves differently when it comes to various parameters like returns, taxation, duration, and investments.  The selection of a specific fund depends upon personal preference, risk appetite, and the financial goal of the investor.  Some investors find it difficult to distinguish between equity funds and debt funds. Let us get a better understanding of both investment options so that the knowledge can help to make viable decisions. What is an Equity Fund? Equity funds are mutual fund schemes with investments in company shares and related securities like derivatives (futures and options) that trade in the stock market and have the potential to grow rapidly. The objective is capital appreciation and dividend-paying stocks that provide an income to the investor.  Equity funds are categorized as large-cap, small-cap, mid-cap, and thematic funds. When a fund manager invests more than 65% of the portfolio in stocks it is considered an equity fund. What is a Debt Fund? Debt funds are mutual fund schemes with investments in securities and money market instruments that generate fixed income. These are corporate bonds, commercial papers, treasury bills, non-convertible debentures, certificates of deposit, and government securities.  Debt funds are secure investments, with lower returns and a fixed maturity period. Differences between Equity vs. Debt Fund 1. Instruments Equity funds invest in company shares traded in the stock market and securities and derivatives like options and futures whereas debt funds invest in debt and money market instruments like corporate bonds, commercial papers, treasury bills, non-convertible debentures, certificates of deposit, and government securities.  2. Return on investment Equity funds yield higher returns in the long run whereas the return on investment in the case of debt funds is low to moderate when compared with equity funds.  3. Tax saving options Investors can save taxes by investing in ELSS mutual funds up to INR 150,000 per year. There is no such tax-saving option for investors in debt funds. 4. Risk appetite Investors with moderately high to high-risk appetites opt for equity funds whereas investors with low to moderate-risk appetites choose debt funds as their investment vehicle. 5. Timings The timings of both buying and selling of equity funds are very important as they are dependent upon the stock market which is known for its volatility. The timings of buying and selling in the debt funds are not as important as it is for equity funds. The duration on the other hand is more important than the timing for a debt fund.  6. Expense Ratio In equity vs debt funds, the expense ratio of equity funds is much higher as it is managed by fund managers whereas the expense ratio of debt funds is lower when compared with equity funds. 7. Taxation Investors have to pay a 15% tax on capital gains from equity funds that are held for less than 12 months. The capital gains on equity holdings for more than 12 months are tax-exempt up to an amount of INR 1 lakh. All the gains beyond this amount are taxed @ 10%.  In equity vs debt funds, if investors are holding debt funds for less than 36 months then they will have to pay short-term capital gains tax and it will be taxed as per the tax bracket of the investor. When the debt holding is for more than 36 months investors can avail of indexation benefits and post it the long-term capital gains are taxed at 20%.  8. Investment duration Equity funds are investment options for the long run as they help investors to meet long-term financial goals. Debt funds are investment options for the short run as the duration ranges from 1 day to several years. These are often used as alternatives for savings and fixed-deposit bank accounts. How can one invest in equity or debt funds? Investors can take the help of financial advisors at the Edufund App for informed decisions as the platform offers an option to choose from 4000+ mutual funds in both equity and debt fund categories. The platform guarantees transparency and secured transactions because of top-class 128-SSL security.  Moreover, the value-added benefits like zero commission, no hidden charges, free advisory, and tracking investments through Edufund’s scientific fund tracker help to save a good amount that can be invested further in either or both equity and debt funds.  Conclusion In the discussion between equity vs debt funds, it is important to note that these are tax-efficient investments when compared with other asset classes. Both are mutual funds that help investors to meet their investment goals effectively. FAQ Which is better debt fund or equity fund? Equity funds generate slight higher results Which is riskier debt or equity? Debt has a real cost to it, the interest payable Is SIP in debt fund good? All debt funds are not suitable for SIPs Are debt funds good for the long term? Investors should invest in long-term debt funds if they have an investment time frame of more than 3 years TALK TO AN EXPERT

When choosing a mutual fund, you need to consider factors like risk, performance, fund portfolio, and expense ratio. The Total Expense Ratio, or TER, is one of the most important factors to know about before investing in a mutual fund. Let's see why you need to study it, what are expense ratios, and the best mutual funds with low expense ratios for you to consider.   What is the Expense ratio?  Mutual Funds incur certain operating and expenses for managing funds like – sales & advertising expenses, transaction costs, investment management fees, registrar fees, etc. The expense ratio includes all such expenses incurred by the Mutual funds. It is adjusted to the fund's Net Asset Value (NAV). It is adjusted daily and is a cost to the investor.   How does the Expense ratio make a difference?  Let's consider the actual difference expense ratios can have in the wealth created.  Here, we have taken two types of PGIM India Midcap Opportunities Fund – regular and direct. The time period taken is ten years.    Scheme SIP Annualized Returns Expense ratio Final corpus (Rs.) Direct 10,000 21.01% 0.40% 1,26,35,714 Regular 10,000 18.96% 1.95% 1,01,62,185  By investing in a regular fund, you incur an expense ratio of 1.95% compared to 0.40% in the direct mode. This expense ratio has cost the investor an additional Rs. 24,73,529. This means that by investing in a regular fund, you lose almost 24 lakh rupees! The gap increases significantly when this is compounded for larger SIP values and for longer time horizons.  With lower expense ratios, the wealth creation in a portfolio increases to a great extent. Mutual Funds with a low expense ratio Scheme name Category Expense Ratio Returns (3yrs) Mirae Asset Tax Saver Fund  ELSS 0.50% 19.91% PGIM India Mid Cap Opportunities Fund Mid Cap 0.40% 38.48% UTI Nifty 50 Index Fund Index  0.20% 14.57% Canara Robeco Small Cap Fund Small Cap 0.39% 39.01% HDFC Index Nifty 50 Fund Index 0.40% 13.80% *Disclaimer – This is not a direct recommendation How to reduce the Expense ratio of your funds?  Choose a fund with a low expense ratio in respective asset classes. But at the same time, remember not to compromise on the return aspect of the fund because if the fund has low-risk adjusted returns, then having a low expense ratio will not benefit your portfolio.  Adopting a passive approach to investing significantly reduces the expense ratio. For example, instead of investing in a blue chip or a large-cap mutual fund, you can choose a Nifty 50 Index Fund, which comprises the same large-cap companies' stock but has a lower expense ratio than the former.  Last but not least, always choose Direct Funds instead of Regular ones. This way, you don't have to pay an additional commission to distributors.  Should expense ratio be a deciding factor when choosing your mutual funds?  Definitely not! The major factors you should consider while choosing a mutual fund are the risk-adjusted returns, the performance, the portfolio composition, the standard deviation, the fund managers' performance and experience, and whether or not it fits your investment objective. The expense ratio should only be one of the above factors to compare two or more mutual funds in the same category offering similar returns but not a deciding factor.  For instance, funds may generate better returns than the category average but with a slightly higher expense ratio. You may consider the power of compounding with the returns generated in such cases.  Conclusion  Never choose a fund solely based on the expense ratio. Always perform a detailed fundamental analysis to ensure you choose the right fund for you and your portfolio. This will make your investment journey smooth. If you find it challenging to choose a mutual fund that's right for you, take the help of an investment advisor who will guide you through the entire process.  Consult an expert advisor to get the right plan TALK TO AN EXPERT

To guarantee a bright financial future for your kids, you must have a solid financial strategy. It's crucial to base your investments on the aspirations of your children and anticipated cash flow needs. In this blog, we have discussed the key milestones to plan for your child's investment plans. School When budgeting and preparing their investment for their child's education, parents should expect the primary school tuition price, and expenses like uniforms, books, extracurricular activities, transport fees, yearly vacations, picnics, etc., to be between (INR 1.25 - 2 lakh per year). Higher Education While planning for your child's higher education The yearly cost of study and living is the first and most important element that one has to take into account before enrolling in college. Universities offer housing on their campuses for both domestic and international students. However, if the institution you have selected to attend does not provide this amenity, you may simply obtain personal accommodations. Following are the estimated costs of studying UG and PG courses from India and abroad:  Govt Colleges in India will cost around Rs 5-6 lakhs. Private Colleges in India will cost around Rs 8-10 lakhs. Studying Abroad can cost up to INR 1 crore. Marriage Although it is stated that marriages are created in paradise, they take place on Earth and require a lot of money to make them memorable. You arrange your "Big Day" to be a special occasion for both you and the family that attend the ceremony. The Indian wedding market is presently worth over Rs. 1,000 crores and is expanding quickly, at a pace of 25–30% annually. The average cost of a wedding in India ranges from INR 20 lakhs to 5 crores. According to estimates, the average Indian spends one-fifth of his lifetime earnings on his wedding. Also, you need to assemble a skilled team, including event planners, florists, caterers, and fashion designers, to make your special day extraordinary. Therefore, before investing in a child investment plan, you must make plans for each of these milestones for your children. Below, we have included the investment strategy and several investment options for your kid's future. Investment strategy for children's investment plan List specific goals upfront, such as the child's preferred education and related costs. After paying all of your regular costs, you'll be able to estimate how much you can afford and how much you'll need to set aside each month. However, you must remember that loans can also be utilized to fund your education. As a result, you do not have to sacrifice other expenditures like healthcare and retirement to save for your child's education. As the financial goal approaches, reduce your stock exposure to lessen the likelihood of adverse market changes. Different investment options for your child Fixed deposits and other traditional products might not be enough to cover your child's college costs. Other products like equities funds, balanced funds, and shares should be taken into account. You can select one of the following investment strategies depending on your time frame: The best option is debt mutual funds if your child will need the money within five years. Such funds can provide liquidity while producing returns that are more than the rate of inflation. You can mix several financial products for long-term aims. You have the option of investing in gold, stocks, and debt. Although exposure to the stock market is hazardous, investing in equities allows investors to generate larger profits over the long run. PPF is one of the greatest investment options for financing a child's education. To establish a sizable corpus, you must begin this early and invest steadily. Numerous insurance providers provide a range of kid-focused solutions. When your child needs the money to pursue further education, you may choose to implement more mature policies. FAQ Which investment is good for a child's future? When your child is still small and you have at least 15 to 20 years till retirement, it is excellent to begin investing in equities mutual funds. This enables you to withstand shocks like stock market collapses and volatility. Why is future planning important for children? The best way to guarantee money for your children's future needs is through child plans. Many modern plans come with a variety of features that can help you develop your assets and ensure that your kids have money for college. Without having to deal with the pressure of a large investment, you may frequently make little investments. When is the best time to buy a child's education plan? Generally speaking, it is best to get a kid's education plan as soon as possible. This is so that you can leverage the benefits of compounding if your investment has more time to develop.  Investment plans for children help you and your child prepare financially for growing education costs, unanticipated illnesses, and bad circumstances. Planning for your child's future must begin as soon as feasible. This spreads out the risks involved and gives your assets more time to flourish TALK TO AN EXPERT

Investing is no longer regarded as affluent. It has become a necessity to secure one’s future. Let’s compare LIC vs Mutual Fund to help you decide which is the better choice for you. What are LIC plans? The government owns the insurance and investment company Life Insurance Corporation of India (LIC). It satisfies individual insurance needs by providing customized policies. LIC is a pioneer in the insurance sector and one of the oldest providers of life insurance. A family is protected by life insurance from unanticipated occurrences like death. It aids in safeguarding a family's financial future. The main goal of life insurance is to provide "death benefits" to the dependents in the event that the family's breadwinner passes away too soon. Benefits under LIC plans The benefits covered under LIC insurance are as follows: Risk coverage: The greatest benefit of LIC insurance plans is that it provide risk coverage. It helps you with finances during traumatic events like unplanned death and ensures your loved ones are taken care of financially in such a situation. Financial security: It provides you with financial security. It reassures you that your loved ones are protected and secured. Building financial corpus: It helps you build a financial corpus that can help you secure your family's needs and wants in the future. It safeguards their financial needs to the fullest. Tax benefits: The LIC covered to INR 1.5 lakhs per annum is completely tax-free under Section 80C of the Income Tax Act, 1961. What are Mutual Funds? A common kind of investing, mutual funds aggregate client funds to invest in a variety of securities, including stocks, bonds, and money market instruments. Mutual funds are governed by the Securities Exchange and Board of India (SEBI). Investors have access to expert fund management via mutual funds. The investment decisions are made by the fund management team after careful consideration of the fund's goal. This skilled management enables assets like bank savings accounts and fixed deposits to outperform more conventional ones. Mutual funds come in two basic varieties: equity and debt mutual funds. Equity-related products and equity are the main investments of equity mutual funds. Large-cap, mid-cap, small-cap, multi-cap, sectoral or thematic, tax-saving, etc., are a few of the several types of equity funds. Debt mutual funds, on the other hand, invest in corporate bonds, government securities, and other financial products. Liquid funds, dynamic bond funds, short-term and ultra-short-term funds, and others are some of the several forms of debt mutual funds. Benefits of Mutual Funds The following advantages are included with mutual funds: Proper fund management: Mutual Funds are managed by professionals and reputed companies like Asset Management Funds. They carry out extensive research and time the market to ensure that the fund performs well. Easy to Invest: Mutual Funds are great for people looking for easy investments. Mutual funds are managed by fund managers which means you do not have to monitor the market or adjust your stocks. The manager makes all the necessary decisions to secure your money. SIP options available: You can start a SIP for Rs. 100 or 50,000! That is the biggest benefit of starting a SIP in a mutual fund, you can decide the amount when to debit the money, when to pause, and when it steps up the amount. Better returns: Mutual funds have the potential to beat the market and inflation. They give you better returns than your FD, PPF, or savings account. However, there are market risks that can affect your returns. Diverse categories for investment: There are different kinds of mutual funds that you can invest in. Equity, debt, and index funds to make the most of your savings. Affordable investments with easy payment options: Mutual funds are affordable. From a student to a risk-averse investor to a financial advisor, anyone can invest in mutual funds. Comparison of LIC vs Mutual Fund Following is the difference between mutual funds vs LIC plans FeaturesLIC Mutual FundsMeaningA pure protection strategy like life insurance will provide your family with financial security in the event of your untimely passing.A pool of investments from many institutions and people is what gives rise to the financial instrument known as mutual funds.PurposeA conventional life insurance policy's primary goal is to secure the financial future of the policyholder's family in the event of an unexpected death.Mutual funds' primary goal is to increase the return on your assets so that you may achieve your long-term financial objectives.LiquidityThrough its lending facility, it manages liquidityInvestors are always free to sell their shares.Risk involvedComparatively speaking, life insurance is less risky than the alternatives.The risk involved is substantial since investments made through mutual funds are susceptible to market hazards.TenureThe policy has an established policy tenure.The tenure of mutual funds is nonexistent. Any amount can be invested at any time.ReturnsReturns vary depending on the type of insurance but are often modest in comparison to investments.Long-term returns are much higherRider benefitThe policy has additional rider benefits.Mutual funds do not offer rider perks as such.DiversificationWhen you put all of your money into one plan, there is no way to diversify your investments.Mutual funds include a variety of securities, which broadens the investor's portfolio.Tax benefitsSection 80c of the Income Tax Act of 1961 exempts up to INR 1.50 lacs in premium payments from taxation.Only section 80c of the Income Tax Act of 1961 applies to ELSS mutual funds when it comes to tax exemptions. LIC vs Mutual fund. Which is better? Life insurance is a must. In the case of the insured's untimely death, it offers the family financial security. But investment is just as significant. It aids in the development of a corpus that enables one to live comfortably and achieve all of one's ambitions. People frequently mix up their needs for investments with insurance, which is a mistake.  Financial experts advise investing in mutual funds and purchasing term insurance for insurance needs as a cheaper alternative that will also contribute to long-term wealth growth. Since SEBI regulates mutual funds and also establishes an upper ceiling on the expense ratio, the costs are capped. Mutual funds also have the potential to provide better returns than life insurance plans with an investment option since they invest in a variety of asset classes. Each person has their own style of thinking and attitude while making investment plans. Some people desire financial security, whilst others desire higher returns. Before making any type of investment, including those in mutual funds or LIC policies, it's crucial to evaluate your financial situation. Consult an expert advisor to get the right plan TALK TO AN EXPERT

Which is better: SIP vs SWP vs STP? Systematic Investment Plan (SIP), Systematic Withdrawal Plan (SWP), and Systematic Transfer Plan (STP) are the plans offered by the fund houses which are strategized in a way to suit the need of each of the investors. A parent aiming to regularly save for his/her child’s education could choose a SIP. A retiree who has received lumpsum earnings from his PF could invest in SWP and receive regular income. An employee who received a large bonus could invest in a debt fund, but also could reap the benefits of an equity fund by putting their money into STP. SIP: Systematic Investment Plan By investing in equity funds that are more volatile, you reap the maximum benefits from the structure of the plan - compared to debt funds which are relatively stable. Since you are investing at regular intervals irrespective of a market up/downturn, you receive the benefits of Rupee cost averaging your cost of purchase is average over the time horizon. Also, as the investment is in small amounts, you do not feel the burden of investing or your future goals forming a hindrance to your present commitments and expenses. There are no tax implications in these plans, and ELSS schemes also provide provision for tax deductibility under Section 80C of the Income Tax Act 1961. Types of SIPs 1. Flexible SIP   Flexi SIP allows the investor to change the SIP amount according to market fluctuations. The predetermined formula enables the investor to invest more when the market is low and reduces the investment when the markets perform well.   2. Step Up SIP An investor can increase the investment amount or percentage at fixed intervals. Step Up SIP is perfect for investors who fail to regularly increase their SIP amount when their income rises.    3. Perpetual SIP   When an investor begins an SIP, the SIP mandate requires them to enter the start and end date of the investment tenure. In some cases, investors fail to enter the end date. Every SIP that does not have an end date becomes a perpetual SIP, and it will go on till 2099.   4. Trigger SIP  Trigger SIP allows investors to set a trigger value for the SIP investment. It can be when NAV falls to a particular level, specific dates, or even levels of an index like Nifty or Sensex. You can decide when a certain amount should be withdrawn from your bank and utilized to purchase units of a selected plan.    Benefits of SIP 1. Financial discipline    When you opt for a SIP, you indirectly get into the habit of keeping aside an amount of money from your income for investment.   2. Fund managers    Mutual fund investments are supervised by professional fund managers who have proven experience in managing portfolios. They observe market trends and make wise decisions in order to grow your money and minimize major losses.   3. Benefit from compounding  Compounding means you don’t just get the return on what you spend out of your pocket but also what you earn from it. This basically leads to your corpus getting richer with time. 4. Rupee cost averaging     When you invest an amount through SIP, you do not need to worry about timing the market. You buy a high number of units when the NAV is low due to the markets, and on the other hand, you buy a lesser number of units when the NAV is high. The cost of purchasing funds averages out over the period of investment.   STP: Systematic Transfer Plan This plan allows you to transfer amounts from one fund to another (within the same fund house). There is typically a transfer of amount from Debt to Equity Fund and is suitable for risk-averse investors who fear market risks and fluctuations. For example, if you have received a lump sum amount on account of your retirement or as a large bonus, you could invest in a liquid fund or debt fund. At fixed intervals, as an investor, one could give instructions to shift small amounts into an equity fund. Using this strategy, one eliminates the risk of investing a large amount at the wrong time in the market, thus averaging the cost of purchase. It also obtains the advantage of constant reallocation of the portfolio with debt and equity, earning consistent returns (greater than the amount earned in a bank deposit). The plan is similar to an SIP, but the amount is invested from your previous SIP instead of deducting the amount from your bank account. These plans do have tax implications. Every transfer from one fund to another is considered as redemption from the fund and is charged capital gains tax (the investor enjoys the benefit of being initially invested in a debt fund but is charged capital gains tax for an equity fund – which is lower). Compounding effects - as returns get reinvested at periodic intervals and rupee cost averaging are also the advantages of this plan similar to an SIP. Types of STPs 1. Fixed STP  Fixed STP allows an investor to transfer a specific amount at a fixed frequency   2. Flexi STP An investor can transfer an amount from a source to a specific fund according to market performance.   3. Capital Appreciation STP   The investor can choose to transfer only the returns from the source plan to a targeted plan and not the entire invested amount.    Benefits of STP 1. Rupee cost averaging  Similar to SIP, rupee cost averaging is also applicable for STP. Investors transfer fixed amounts to different funds at different price points, and hence the investor buys more units when the markets are low and buys a lesser amount when the markets are high. Eventually, the purchase price averages out over the period of investment.    2. The returns are consistent   STPs give investors consistent returns. As the money is invested in debt and equity funds, the returns are better than fixed deposits provided by banks.   3. Diversification Portfolio rebalancing happens naturally in STP as an investor can transfer a portion of the invested amount from a debt fund to an equity fund on a regular basis. As a result, they earn more returns during their investment tenure.   SWP: Systematic Withdrawal Plan  This plan could be considered the opposite of an SIP, where instead of investing fixed small amounts at regular intervals, one withdraws fixed amounts from the fund. The investor initially invests a large/lumpsum amount into the plan. One can choose to receive fixed amounts at an instructed frequency (monthly, quarterly) known as fixed income withdrawal, or can choose to only receive the gains (ROI or returns) on the invested amount, which is known as appreciation withdrawal. One can keep redeeming the amount until the balance with the fund reaches zero which can be considered as the maturity of the plan. SWP provides the freedom of choosing the amount that an investor wants to receive calibrated according to his/her expenses, as opposed to a dividend plan of a mutual fund where the fund manager decides the dividend.  Each withdrawal attracts a capital gains tax as it is considered to be a redemption. However, this plan is considered the most tax-efficient route when compared to the dividend plan of mutual funds and fixed deposit interest accruals.  NAV30Number of units held1000Invested Amount30000Withdrawal Amount2000NAV at Withdrawal (assumed)32Units withdrawn62.50 Cost1,875.00 Gain 125.00  Consider the example (as shown in the table). An investor has 1000 units in the ABC fund and has purchased them at an NAV of 30. Hence, his cost price per unit of the fund is Rs 30. The investor has fixed instructions for withdrawing Rs 2000 every month. In the first month of withdrawal, the fund made good profits and saw an increase in the NAV to 32. The units hence withdrawn would be Rs 2000/Rs 32 (current NAV) which is 62.5 units. The cost price of these units was Rs 1875 (62.5 *30). The gain made on the transaction is Rs 2000 – Rs 1875 = Rs 125. In an SWP the investor pays tax on the gains from the withdrawal or redemption. Hence, in the above example, one would be paying a capital gains tax of Rs 125. However, if the investor had invested the same in an FD, he/she would have to pay tax on the interest income with the tax rate according to the individual’s tax slab (which is greater than capital gains tax). Types of SWPs 1. Fixed amount SWP The investor selects a particular amount and a specific date on which the amount will be withdrawn.    2. Appreciation SWP   The investor can withdraw only the returns on investment and not the principal amount.   Benefits of SWP 1. Financial discipline  An investor automatically receives a predetermined amount from their investment periodically. This can make them financially disciplined as they learn to live life with a limited amount per month. It also protects them from withdrawing large amounts from their portfolio during a poor market performance.    2. Steady Income They receive a steady income periodically, which can be a huge advantage to the investor in case of retirement or if they depend on a steady income to pay for their financial needs. 3. Achieve financial goals The second mode of income can always be helpful if you are looking to achieve a financial goal, especially when you have monthly commitments.     SIP vs SWP vs STP FactorsSIPSTPSWPTypeRegular InvestmentTransfer from one fund to anotherWithdrawal planGoalLong-term investment to gain from the appreciation of the marketCapital Appreciation of the lump sum money received (idle money)Regular income – SourceProcessInvesting fixed amounts at a regular frequency Asset reallocation by shifting a small amount between funds (Debt ? Equity)Withdrawal at periodic intervals from the fund (opposite of SIP)Tax implicationsInvestments do not attract tax capital gains are taxable (depending on the equity of debt and time period)Every transfer is taxed and is considered a redemption from the fundGains from the withdrawal are taxed. Considered Tax efficient over FDs and other recurring income optionsTypical Investor Profile/SuitabilityInvestors looking to save every month for a long-time horizonRisk-averse Investors who have idle money (large corpus – retirement money or bonus)Investors who would want a regular source of income and have a lump sum corpus in hand.  FAQs Is SWP better than SIP?   SIP helps you invest money on a regular basis, while SWP ensures you receive a portion of your invested money regularly. You can opt for SWP when you have a big corpus. Choose the best option based on your financial status and long-term goal.    Are SIP and SWP the same?   SWP is a systematic withdrawal plan that helps investors regularly withdraw a portion of their money from their funds. SWP is completely opposite to SIP, as, in the latter, the investor invests a predetermined amount of money at regular intervals.  Is STP a combination of SIP and SWP?   The systematic investment plan, Systematic withdrawal plan, and Systematic transfer plan are all systematic methods of investing and withdrawing money. Each has its own advantages and purpose. STP allows investors to transfer investment amounts from one fund to another. SWP allows investors to withdraw money regularly, and SIP allows investors to invest money in regular intervals.    TALK TO AN EXPERT