Investing in child’s future: Here’s expert advice

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You might spend less on yourself but you will definitely leave no stone unturned for your child’s future. From your child’s education to their weddings, every parent wants to create a healthy corpus with longevity in mind. To reach these milestones, where should you invest your money to get the best returns at the right time? Money9 Helpline hosted Complete Circle’s co-founder Kshitiz Mahajan to resolve such queries.

Edited excerpts

Atul Kumar: I have two children, one is 3 years old and the second one is 10 months old. Can I buy diret mutual fund for them on their names?

Mahajan: For both your children, you can take a mutual funds scheme on their names. You can invest through SIP, STP or any other facility available. It is very simple you have to give cheques from your account towards the investments. Your KYC should be registered, as that is the normal requirement for mutual funds. You have to also provide your child’s birth certificate and establish a relationship with kids. One thing you should keep in mind, that investment will go from the guardian’s individual account.

Arka Basu: Can two balanced advantage funds serve the cause for children’s education and how to realize the money close to the goal?

Mahajan: My suggestion to you is if your horizon is 10 years, instead of a balanced advantage fund, it better that you invest in an index fund- large-cap or two multi-cap- one large and mid category.