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The children’s gift funds are a type of mutual fund scheme. These funds are positioned at funding various life events of children such as higher education and marriage. Children’s gift funds are classified under hybrid or balanced mutual funds.
These funds are further classified under hybrid equity-oriented and hybrid debt-oriented funds depending on their debt and equity exposures. If the fund’s equity exposure is more than 60%, then it is considered as the hybrid equity-oriented fund. If the fund’s debt exposure is more than 60%, then it is considered as the hybrid debt-oriented fund.
Investments in these funds can be made only in the name of the minor child. Parents or legal guardians are allowed to invest in these funds on behalf of their child.
Following are some of the points to note before investing in the children’s gift fund schemes:
Every parent cares for their children’s future. The best thing that you can do as a parent is securing your children’s future by investing in suitable instruments. Children’s gift funds are one such avenue that ensures the children’s future is well off.