New Delhi. To build the future of their children, parents create a fund by saving every penny. Some invest in FD and some start SIP in mutual funds. If you also want to create a fund for your child and are looking for an option that can fulfill their big dreams, then ICICI Prudential’s Children Plan can prove to be very helpful. Although there are many investment options in the market, children plan can prove to be better in many ways.
Everyone knows how expensive education is becoming these days. This is also necessary to improve the financial future of the child, but the burden of study for higher education is so heavy that it is not within everyone’s power to complete it. But, if you plan and invest from now on, then by the time your child grows up, you will have a good fund which will be enough to fulfill even his biggest dreams.
Mutual fund is the best way
Children schemes of mutual funds are a good way to plan for your child’s future. These provide both a disciplined investment method and the possibility of better growth in the long run. With time, the effect of compounding is deeply visible on this money and this amount increases significantly. In the field of children mutual funds, ICICI Prudential Children Fund is one such scheme which has a long and reliable track record. This scheme has also given good returns over time. ICICI Prudential Children Fund is an open-ended investment scheme specially designed for children.
5 year lock in period
ICICI Prudential’s Children Plan comes with a lock-in period of at least five years or when the child attains the age of majority, whichever is earlier. This fund invests in both equity and debt assets and gives the freedom to invest as per the opportunity even in subjects outside the benchmark, if required. Overall, ICICI Prudential Children Fund can be a better option for parents who want a balanced combination of flexibility, proactive decisions and long-term thinking in their children’s investment plan.
How much return has been given?
How and how beneficial this children scheme can be can be estimated only by looking at the returns. If a person had invested Rs 10 lakh in this fund on August 31, 2001, then by October 31, 2025, this amount would have increased to approximately Rs 3.3 crore. Thus, the fund has given a remarkable annual return of 15.58%. In comparison, a similar investment in the benchmark would have been worth around Rs 2.12 crore, which is an annual return of around 13.46 per cent.
SIP also gave amazing returns
The SIP returns of this fund have also been amazing. If SIP of Rs 10,000 was done every month from the beginning, the total investment would have been Rs 29 lakh and by October 31, 2025, this amount would have increased to Rs 2.2 crore. If investment was being made for the last 15 years, the contribution of Rs 18 lakh would have increased to Rs 55.4 lakh. This means that the rate of return was 13.76 percent. During the same period, the return of its benchmark has been only 11.88 percent. The fund has consistently outperformed its benchmark in the last one, three and five years.
Why is it important to invest early
Suppose a parent has to prepare an amount of Rs 50 lakh by the time his child turns 18 years old. If the first parent (A) starts investing at the time of the child’s birth, he will have to invest Rs 6,598 every month at a simple growth rate of 12% over a period of 18 years. In total, Rs 14.25 lakh will have to be contributed. If the other parent (B) starts investing when the child turns six, he will have to invest Rs 15,671 every month over a period of 12 years. The total contribution will be Rs 22.56 lakh. If the third parent (C) starts investing when the child turns 12, then at a growth rate of 12%, he will have to invest Rs 47,751 every month. The total contribution will reach Rs 34.38 lakh. It is clear from this that raising funds becomes difficult as time passes.
Time is money…how much loss is caused by delay?
Parent B will have to invest Rs 12.3 lakh more than A and parent C will have to invest Rs 20.13 lakh more. This is the real cost of delaying investment. In the end, it comes back to that. The earlier the investment starts, the more effective will be the power of long-term equity investments. If parents wish, they can build a future as bright as their child’s dreams at a very careful pace. You just have to take the right decisions and start investing at the right time, that is, from today itself.
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