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Kids Present Fund – Is it one of the best funding choice for Youngster Schooling?

Kids Present Fund – Saving and Investing Cash for youngster training has turn out to be a main want. Schooling value is skyrocketing in India in addition to overseas. The rising value of training is a priority for everybody. Evidently being a mum or dad if in case you have not deliberate or invested cash for the upper training of your youngsters, chances are you’ll find yourself taking a mortgage.

Let’s check out youngster training value numbers. The price of getting an training in a reputed college at present is round Rs.15000 per 30 days and it’s growing yr on yr. The estimated value of an engineering course in an excellent institute at present is 8 Lakh and that may value Rs.18 Lakhs by 2030 and by 2040 it will value Rs.40 Lakhs. Equally, course of MBA in reputed college is obtainable at Rs.15 Lakhs at present and it’s anticipated to achieve Rs.30 Lakhs by 2030 and should cross Rs.60 Lakhs by 2040.

Don’t get scared by these numbers. Numbers given listed here are to not threaten you however to awake you to plan in your youngster’s training.

In case you are planning for youngster training, chances are you’ll come throughout an funding avenue referred to as a Kids Fund (mutual fund) or Kids Present Fund & chances are you’ll be planning to take a position your cash in it. Right here is full details about the kids’s fund that can show you how to in realizing whether or not – youngsters’s fund is one of the best funding choice for youngster training or not?

What’s Kids Present Fund? 

Kids fund or youngsters present fund is one kind of mutual fund that’s designed with goals particular to child-related objectives. A lot of the youngsters’s funds spend money on each fairness in addition to debt. An investor can choose between equity-oriented or debt-oriented funds primarily based on the danger urge for food.

Kids’s funds include a compulsory lock-in interval of 5 years and it may be prolonged additional till the kid turns into an grownup. Few youngsters’s plans include the optionally available add-on advantage of life insurance coverage. The maturity quantity of this fund is taxable. Nonetheless, dad and mom can take advantage of part 80C tax deduction declare as much as 1.5 Lakhs by investing cash within the youngsters’s fund.

The prime objective of the kids’s fund is to create a fund for needed bills of a kid similar to greater training, boarding, relocation, and many others.

Kids Present Fund Comparability with Different Funding Choices

Here’s a comparability of a youngsters fund with respect to different standard funding choices for a kid similar to PPF, FD & Sukanya Samriddhi Scheme.

Funding Choices Threat Tenure Liquidity Kind of Return Anticipated Return
Kids Fund Reasonable Excessive 5 Years Restricted Market Linked 10 -15%
PPF Low Threat 15 Years Partial Fastened 7.1%
FD Low Threat 6 Months to 10 Years Excessive Fastened 5  – 7%
Sukanya Samriddhi Scheme Low Threat 8-10 Years Restricted Fastened 7.6%
Excessive Threat Fairness Oriented Mutual Funds Excessive Open Ended Excessive Market Linked 15-20%


Observe – Above returns are indicative solely.

After making a comparability of kids fund with different funding choices let’s check out the advantages and downsides of kids fund.


  • Kids fund is a long-term funding choice the place dad and mom can choose a fund primarily based on funding goal and threat urge for food. 
  • Funding on this fund eliminates the possibility of future monetary burden and seems as monetary help for youngster training and different objectives.
  • Few youngsters funds additionally include an extra optionally available add-on of life insurance coverage.
  • The dad and mom can avail tax advantages whereas investing on this fund.
  • Tax indexation advantages on maturity can scale back the tax burden.
  • One can make investments on this fund through SIP and Lumpsum route. 


  • This fund has a lock-in interval of 5 years and above therefore liquidity is restricted.
  • The return is linked with the market and decrease in comparison with equity-oriented mutual funds.
  • Kids fund is a categorization made by SEBI but it surely doesn’t provide something particular in comparison with mutual funds besides add-on advantages and a lock-in interval.

Kids Present Fund – Is it greatest funding choice for Youngster Schooling?

Wanting on the comparability, advantages, and downsides, youngsters fund is an excellent funding choice for youngster training. Nonetheless, it isn’t one of the best funding choice.

As per me, Kids funds are like a hybrid fund with few further advantages and a lock-in interval of 5 years and above.

Kids training is a long-term affair and from a long run return perspective fairness mutual funds with the SIP route provides a lot greater returns in comparison with the kids present fund.

In case you are frightened in regards to the growing value of upper training you need to create a diversified funding portfolio with main funding in equity-based mutual funds and excessive threat, excessive return funding choices to get superior returns.

Nonetheless, in case you are a low-risk or conservative investor you may go for PPF or Sukanya Samriddhi Scheme to take a position in your youngster’s future.

Comfortable investing!

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