Every parent wants to give their child a good life. A good school, college, and a safe future are important goals. But saving money for this can feel hard sometimes. Because of that, many parents are looking for smart ways to grow their money. One great option is a one time investment plan in mutual fund. It is easy to start. You just invest once and leave it for many years. Also, it grows more with time. So, if you want your child to study well and live better, this type of plan can truly help you.
How One Time Investment Plan in Mutual Fund Helps Your Child?
A one time investment plan in mutual fund works well for parents who want to save for the long term. Also, it offers many strong reasons to choose it:
- Power of compounding works better over time: If you invest early, your money keeps growing every year. So, more time means more money.
- You invest only once: If you do not want to pay monthly, this is a good choice. You put in your money once, and it stays invested.
- Better returns than bank savings: Banks give fixed and small returns. But mutual funds can give higher returns in the long run.
- Choose the time period as per your goal: If your child is 5 or 10 years away from college, you can pick a plan that matches that goal.
- Easy to manage and check: You can use tools like a mutual fund monthly income plan calculator to check how much return you may get in the future.
- Your money is not in one place: Mutual funds invest in many areas, like stocks or bonds. So, your risk is less, and you get stable growth.
Because of that, many parents now use this method to build a safe fund for their child’s future needs.
Different Types of Mutual Funds to Choose
There are many kinds of mutual funds. So, it’s important to know which one is good for your goal. Here are some options:
- Equity mutual funds for growth: These invest in shares. If your child’s goal is many years away, these can give high returns. But they come with a higher risk.
- Debt mutual funds for safety: These invest in safe bonds. So, if you don’t want to take too much risk, you can go for this.
- Balanced or hybrid funds for mix: These invest in both equity and debt. Because of that, they give a mix of safety and growth.
- Children’s gift mutual funds: These are made only for saving for children. They offer tax savings and lock-in periods for better planning.
- Index funds for simple returns: These follow stock markets. They are simple, low-cost, and give decent returns over time.
- Mutual fund fixed income plan: This is good if you want steady income later. You can use it for college fees or living costs.
If you want to choose the best mutual funds to invest in, it is better to talk to an advisor. Also, your choice should depend on how many years you have before you need the money.
Tax Benefits of Mutual Fund Investment
Another good thing about a one time investment plan in mutual fund is that it can also help you save on taxes. Because of that, you can grow your money and also pay less tax.
- ELSS funds save under Section 80C: You can get up to ₹1.5 lakh in tax savings each year with Equity Linked Saving Schemes (ELSS).
- Long-term equity gains are tax-free up to ₹1 lakh: If you keep your fund for more than 1 year, you don’t have to pay tax on gains below ₹1 lakh.
- Indexation benefit for debt funds
If you invest in debt funds for over 3 years, you get help from inflation-based tax rules. So, you pay less tax. - No TDS like in fixed deposits: You get the full amount during withdrawal. That’s better than banks, which cut taxes directly.
- Tax-free maturity in children-focused funds: If held till your child turns 18 or completes education, some plans give full money without tax.
Things to Know Before You Invest
Before you put money in a one time investment plan in mutual fund, it’s important to think wisely. Also, a small mistake can cost you a lot in the long term.
- Know your goal and timeline: Ask yourself, what is the money for? If it’s for school, you may need it in 5 years. If for college, maybe 10 years. So, pick a plan that suits the time.
- Know your risk level: If you are okay with ups and downs, equity is good. But if you want safe returns, then debt funds may suit you better.
- Check fund past performance: Look at how the fund has done in the past 5 or 10 years. It tells you how stable and strong it is.
- Use a return calculator: Tools like a mutual fund monthly income plan calculator show you how your one-time investment may grow. So, it helps you plan better.
- Read about the fund manager: A good fund manager knows where to put the money. So, always check their experience and past success.
- Keep some money for emergencies: If you need money for sudden health or home needs, keep cash aside. Don’t put all your money in mutual funds.
- Keep checking once a year: You don’t need to change things all the time. But checking once a year helps you see if your plan is on track.
If you do these small checks, your benefits of investing in mutual funds will be greater and better over time.
Because dreams deserve planning, and your child deserves the best.