The Coronavirus pandemic has scuppered normal life as we know it, and just like you your child is also spending a lot of time indoors as they study and play. It might help to focus your energies on your child’s home school environment.
It is important to prioritise and plan for your child’s future education this year onward. Here are the 3 most important things you can do for your child this year: #1 Buy a child plan. Investing in a good child education plan is the first step towards helping your child on to a successful future. A good education is the foundation for future financial success, and the best child insurance plans in India ensure that they get the right footing for their ambitions. The best child plans help you pay for their future education, and they take care of your child even in your absence by waiving off future premiums but keeping the plan active till maturity age. Child insurance plans take the pressure off your income by paying for expensive future education and even your child’s wedding. Several people go into debt to pay for expensive college education, but a child plan can help you avoid the debt trap and reap bumper rewards for investing in it for several years. #2 Open a savings account in your child’s name. The savings habit will hold you – and your child – in good stead for the future. However, saving money regularly requires a lot of focus and commitment, but it is a habit that your child will thank you for later. Step #2 in investing in your child’s ambitions is to open a savings account in their name. Leading banks in India have minors’ accounts, and you can easily open one for your child and start setting money aside in it every month. Aim to add at least Rs 5,000 in it the moment you receive your salary, and any cash gifts your child may get from relatives. If your child has a piggy bank, encourage them to set aside three-fourths of the savings in the bank account and spend the rest on treats for themselves. In fact, you can teach your child the basics of banking and even take them to the bank branch to deposit money in their account, to pique their interest. #3 Create a study corner for them. Your child probably already has a study table in their room, but this would hitherto be used only for a few hours each evening to complete homework. With the Coronavirus shutting down schools indefinitely, it looks like kids across India will be attending school from home for several more months. Set up your child’s study nook with everything they need to attend online classes, group study sessions, extra tuitions, etc. Get a chair with an ergonomically designed back and armrests, a fast broadband connection, a new laptop, a headset with microphone, an extra storage drawer for books, etc. to make the learning experience comfortable and fun.
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You should make a note of tax on equity mutual fund and several other factors before you invest in this category of funds. Yet, it should be mentioned that these investments are great options for future-proofing your investment portfolio above all else. Many call equity funds as income mutual funds since they will generate inflation beating returns down the line. Some also consider them as the best tax saving mutual funds if you take prevalent aspects of tax on mutual funds into account.
ELSS (equity linked savings scheme) is perceived to be amongst the best and most productive tax savings funds and you can easily start SIP mutual funds in these investments minus any hassles. Tax saving SIP funds or equities may help you beat inflation for the future while also building a sizable corpus that is adequate for meeting all your financial objectives. Diversification of the stock portfolio with periodic rebalancing will ensure that you get the sheer growth and increase that you are basically looking for. Equities can get you high returns and capital appreciation alike. For instance, over the last 5, 10 and 15 years, the Compounded Annual Growth Rate (CAGR) of the Sensex has stood at 15.71%, 11% and 10.96% respectively. The interest rates on provident funds in comparison have hovered between 8.25-9.5% per annum over the last 15 years. In spite of coronavirus induced economic fluctuations, the equity markets are forecasted to bounce back once again. The country will achieve its target of transforming into a $5 trillion economy by 2024-25. Naturally, the equity markets will touch all-time peaks in the future. Disciplined, patient and committed investors will reap the benefits as a result. Equities will go a long way towards helping you surpass inflationary levels in the future. If you earn lower rates on investment as compared to the rate of inflation, then it will lead to erosion in your wealth. Equity investments will enable earning superior returns than inflation while maximizing creation of wealth for the future. LTCG up to Rs. 1 lakh on equity investments will be exempted from taxation while LTCG surpassing Rs. 1 lakh will be taxed at a rate of 10%. STCG (short term capital gains) from equity investments will be taxed at 15%. Returns on gold or debt investments will draw higher obligations in taxes as compared to equities. If you are seeking investments with higher tax efficiency in comparison to debt or gold, you should check out opportunities for investments in equities. You can also draw loans in the future if you need on equity mutual funds and shares alike. You can sell your fund units any day and get the money credited swiftly into your account. You can also pledge investments for loans and repay in the future for removing this pledge likewise. You should avoid investments of the entire corpus or sum into equities. Choose how much to deploy in equities depending upon your age, risk tolerance or appetite, expectation of returns and preferred tenure for investment. You should diversify into various asset classes while retaining equity funds in a considerable chunk for future-proofing the portfolio against inflation. Invest through SIPs in equities for rupee cost averaging benefits and for staggering risks throughout the tenure. |
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April 2022
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