You can invest in one or two diversified equity mutual fund schemes to build a corpus for your kid's higher education
09-Oct-2015 •Research Desk
I would like to start investing for my child's (who is 10-months-old) higher education and marriage. I have seen you advising on TV shows that the best way to approach such investment is not directly investing in any child plans but to buy term plan for the insurance cover and investing in equity-oriented mutual fund schemes. My questions are:
You can invest in one or two diversified equity mutual fund schemes to build a corpus for your kid's higher education. Don't add too many schemes to your portfolio as it will become difficult to monitor their performance.
Here is a list of our recommended schemes: Click Here
Your investments in these schemes won't fetch you any tax breaks. However, investments held over a year in them would qualify for long-term capital gains tax. That mean you don't have to pay any tax on the returns if you hold on to your investments for more than a year.
You should first figure out whether you need the extra insurance cover. Your insurance cover should be enough to take care of your financial liabilities and the financial needs of your dependents. Read: How to Really Buy Insurance
If you really need the extra cover, you can check online term plans like Aviva I-life, HDFC Click2Protect, Max online term plan.