Children's Funds are the special mutual funds that are meant to fulfill specific child related essentials and terms. These are the solutions-oriented plans to meet the children's needs like education and others with the rising costs. As these are a type of mutual funds, they incest both in equity and debt funds, an investor can choose any of the time of option depending upon the time horizon and their risk appetite, respectively. When we talk about Children's Funds, this scheme comes with a minimum holding or lock period of 5 years, also it has a facility to extend the term till the child becomes adult. This mutual fund protects the investor even from the market volatility during the long-term investment plans. Long term investments offer higher returns along with the facility of liquidity. Children's Mutual Fund is one of the substantial methods of savings scheme created to meet the need of the children. The promising feature of this scheme is the interest gained on this plan is tax exempted. On early stages of the, the scheme is operated by the parent or the guardian of the child, once the child attains the age of 18, the plan will be handed over to the child so they could easy get the flexibility. This can be achieved by completing the KYC with the financial institution and with the submission of the KYC, the child will get complete authority of the investment scheme. This financial backup helps the child to build their career and future. The Children’s fund offers an average return of 7.87% with an average maturity period of 1.9 years with multiple benefits and returns.
What are the major advantages of Children's Fund?
- It offers the option of hybrid or balanced funds such as the hybrid equity-oriented fund or hybrid debt-oriented funds.
- This mutual fund scheme offers tax exemption benefits on the interest gained and on returns.
- If the investor invests in hybrid equity-oriented funds will gain higher returns, though this kind of scheme is good option for higher risk appetite.
- Assured returns can be profited with the investment in hybrid debt-oriented funds.
- It creates financial assistance and stability with the long-term investments.
- Children’s fund offers categorization planning for child needs like education schooling or higher studies, home, or other purchases.