Mutual funds better than other instruments on costs, probable returns and tax treatment of final corpus

Mutual funds are investment vehicles that any one can use to meet various financial goals in life. Here, we deal with a select few goals and how investors can reach them:

Planning For Child's Future The arrival of a child in a family is usually a cause for celebration. However, that also enhances the responsibility of the family to give the child a healthy life, a good education and also a secure future. Financial planners stress that, to meet the expenses related to all these in a smooth manner, the family should put in place a sound financial plan soon after the child is born.

There are two very important aspects a family should keep in mind while creating a financial plan for a child.

First, how to create a fund for the child in a way that's not too taxing on the family.

Second, planning for the uncertainties of life: Have a solid plan to mitigate financial risks in case the earning member is no more there to support the child.

For the first, financial planners and advisers recommend investing smartly . This means considering the costs, the probable returns and the tax treatment at the time the fund is made available to the child. This could include investing systematically , which could be through the equity mutual fund (MF) route, PPF , etc.

For the second, most planners and advisers say that the main earning member should buy a term insurance plan. This is because, in comparison to other life insurance policies, costs for term plans are much lower but the coverage amount is very high.

Action Plan:
 Create a large corpus by investing regularly over the years in MFs, PPF , etc

 Take a term plan with a substantially high coverage h Meet expenses for the child's schooling, higher education and marriage

1.ICICI Prudential Tax Plan

2.Reliance Tax Saver (ELSS) Fund

3.HDFC TaxSaver

4.DSP BlackRock Tax Saver Fund

5.Religare Tax Plan

6.Franklin India TaxShield

7.Canara Robeco Equity Tax Saver

8.IDFC Tax Advantage (ELSS) Fund

9.Axis Tax Saver Fund

10.BNP Paribas Long Term Equity Fund

You can invest Rs 1,50,000 and Save Tax under Section 80C by investing in Mutual Funds

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