Hi Srikanth,
I am interested in investing in a mutual fund for my nephew who is less than 10 year old. Could you recommend good mutual funds for him? And can I invest in the mutual funds with him as the first holder and me as a guardian?
Regards,
Harleen
1 Answers
Hi,
You may consider a good Mutli-cap fund or an Equity oriented Hybrid Fund.
Ex : Franklin Prima plus / HDFC Hybrid Equity Fund.
As he is a minor, it is advisable that you invest in your name and have him as nominee to your investments. Whenever you believe is the right time to redeem the units, you can GIFT them to him.
I have given suggestions (as below) to a similar query as yours;
My suggestion would be, you invest in your name and make him the nominee of your investments. You can invest as long as possible and then can redeem the units when required and give the corpus to him. Holding the investment in your name gives you more flexibility in managing it.
Also note that a gift received by a nephew from his uncle/Aunt is not liable to be taxed according to the provisions of the IT Act, but a gift received by an uncle/aunt from his nephew is not covered under the exceptions.
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