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Rs 40 lakh for my daughter

Insurance plans with investment or savings element in them are not an ideal way to buy an insurance cover or to make investments

I want to get a lumpsum amount of ₹40 lakh after 10 years for my daughter. She is now 10 years old and another daughter is three years old. Please suggest the best investment plan. Should I go for ULIP or mutual fund?
- Hemant Ladkat

Never buy an insurance product like ULIP for investment purpose. Insurance plans with investment or savings element in them are not an ideal option to buy an insurance cover or to make investments. They offer very little insurance cover and they are also not the best investment option to achieve long-term financial goals. Always buy a pure term insurance plan to buy a life insurance cover and invest in equity mutual funds to achieve long-term financial goals.

You can invest in an equity-oriented balanced scheme to build a corpus for your daughter. These schemes invest in a mix of equity (up to 65 per cent) and debt. They are less volatile than pure equity schemes and they help you to create wealth over a long period without exposing your investments to a lot of volatility.

Here is a list of our best balanced scheme.

You will have to invest around ₹17,000 every month for the next 10 years to create a corpus of ₹40 lakh. This is assuming that the investment earns a return of around 12 per cent per annum. You will have to invest around ₹20,000 every month for the next 10 years if the investment earns around 9 per cent.

You have not provided any details about your current financial status or investments. That is why we are offering you a general advice. If you have a lumpsum amount to invest, invest the money in a staggered manner in or two balanced schemes. Shift the money out of equity to a safer avenue like bank deposit at least a year or two before the actual goal so that a sudden volatility in the stock market do not upset your plans.

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