Child Gift Fund Plan – KhansisPrimeWealth

 

Child Gift Fund Plan also known as Children’s Gift Fund Plan. As a parent, the moment our little ones begin their journey of life we try to bring to them the best of both worlds. Their needs become our topmost priority. In today’s unprecedented times, parents or legal guardians often find it difficult to provide for their children sumptuously. The reasons possibly could be inflation, job insecurities, deadly pandemic, etc. That brings us to the solution – strategic investments in a set time period. 

 

Mutual fund investment plans are gaining immense popularity because of their flexibility and fair returns to investors of all kinds of financial capabilities. One such fund that is exclusively for your child’s bright future – Children’s Gift Fund Plans.

 

What are Children’s Gift funds? 

These are a type of mutual fund schemes that are positioned to fulfill some important events in the future like higher education or marriage.

 

Classification of Child Gift Fund Plans

These funds are then further divided into hybrid, equity-oriented, or hybrid debt-oriented funds depending upon the debt or equity exposures. For example, if about 65-80% of the fund is equity exposure then it is known as a hybrid equity-oriented fund. 

 

Who can invest in Children’s Gift Funds?

The investments in these funds can only be done in the name of a minor child. Parents and legal guardians can invest on behalf of the child. 

 

Points to be considered before investing in Children’s Gift Funds

 

• The objective of the fund: It is very important to look for the investment strategy and asset allocation of the fund. In case, you are not able to bear the risks associated then go for debt-denominated investments. 

• Lock-in Period: In the case of Children’s Gift Funds, the lock-in period is at least 5 years or the maturity age of the child (whichever is earlier). In case you are not in for long-term investment then it is not recommended to invest in these funds. Therefore understand your requirements before investing.

• Documentation: For investing in children’s gift funds, one is required to present official documents that prove one is a parent or a legal guardian of the child. At the time of redemption, it may be required to furnish additional documents pertaining to the child. One important 

• Rate of Return: For the best returns, one can invest in hybrid equity-oriented funds. But high returns come with high risks. However, if you are not ready to bear any risks and are willing to settle with moderate returns, then invest in hybrid debt-oriented funds.

 

Having mentioned the above points, it is to be noted that a bank account of the minor is a necessity for children’s Gift funds. 

 

Benefits of Children’s Gift Funds 

• It instills financial discipline over a long term 
• It allows better planning for your child’s future events
• There are no tax implications until the redemption
• Taxes payable at redemption is minimized due to the benefit of indexation.
• Management of these funds is easy and straightforward
• It helps to beat inflation as these funds have a lock-in period for almost 18 years. It helps one tackle inflation in the future and enables the smooth execution of various important life events of your child.

 

Every parent cares about their children’s future. The best thing to ensure a bright future is to strategically invest in suitable financial instruments. Children’s gift funds are one such avenue.

At Khasnis Prime Wealth, we recommend the best children’s gift funds as per your financial capabilities and the latest market trends.