Hi Sreekanth,
I have read most of the articles here. My knowledge in Financial Planning tools has increased a lot after reading your blog. I have few questions here.
- What is the best Kids Bank account? I saw that SBI account is a zero balance account and provides some Accidental Benefit and a child plan as well.
- Are liquid Funds a good way to have emergency funds? What are the other options available which can be liquefied easily?
- I have a lumpsum amount which I want to invest in MFs. How do I select my funds? And what kind of funds are good for lumpsum investments?
5 Answers
Hi Hima Bindu,
Thank you for reading my blog posts :)
1 - Suggest you to open a kid's bank account in a bank where you have Salary account. Kindly do not go for Child plans. As a parent, you need to have an adequate life cover through a term insurance plan and nothing else is essential in terms of life insurance requirement.
2 - Liquid Funds (first priority) & Arbitrage Funds (over and above Liquid fund savings). You may also consider a Sweep-in Savings Bank account.
Kindly read:
http://www.relakhs.com/best-debt-mutual-funds-india-top-debt-funds/
http://www.relakhs.com/best-arbitrage-funds-returns/
http://www.relakhs.com/list-of-best-investment-options-schemes-in-india/
3 - Before identifying MF schemes, suggest you to first set your financial goal(s), investment objective & time-frame. So, kindly let me know your objective & time-frame!
Kindly read:
http://www.relakhs.com/investment-planning-investment-plan/
Thanks Sreekanth,
I read the articles you suggested above, here follows my questions again :)
- Is it a good idea to invest in SIPs via kids accounts(Via SIPs)? For their education / marriage savings etc..?
- Arbitrage Funds looks interesting, does this need regular or continuous monitoring when compared to other MFs?
- I have a lumpsum of 3L which I want to invest for Kids education (1.5L each) for 10years. Can you suggest some funds and how I can divide the funds, if needed?
Hi Hima Bindu,,
1 - Advisable to invest in Parent name and have kids' as Nominees.
2 - Gains on Arbitrage funds if units are held for more than 12 months, are tax-free. So, for Emergency fund purposes (if one is not sure when to withdraw), a portion of contingency fund can be invested in Arbitrage fund. Most of these funds give similar returns.
3 - You may consider one Diversified Equity fund (40%) + Balanced Fund (40%) + Mid-cap fund (20%) for next 8 years or so.
Ex : Franklin Prima plus + HDFC Balanced fund + UTI mid-cap.
Hi Hima Bindu,
(The below answer is in response to your reply which has been marked as PRIVATE.)
1 - One can maintain an Excel sheet tagging the funds Vs goals.
2 - One can have different nominees for different Fund folios, and inform the guardian/spouse/nominees about the investments ear-marked for the goals.
Kindly check out below article:
http://www.relakhs.com/nomineeapp-financial-details-nominees/
You can invest in Direct funds through CAMS offices, but kindly make sure that you tick 'Direct' option in forms.
Yes, the portfolio looks ok to me :)
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