Yes, its a Mutual Fund. Children Plans which has always been in the form of Life insurance, is what we all have heard, which had been working exactly like normal ULIP's or Mutual fund with slight twist and turns. Actually it never added any value except for the fact that it was sold with an emotional touch, but with very high Loading Charges.
Now here comes a children plan from a Mutual Fund company, which works exactly like any other mutual fund with few value adds and also giving emotional touch by investing in the name of your Child to secure their future.
Benefits
- Charges are very less as compared to life insurance products.
- Free Personal Accident Cover equivalent to 10 times the value of the Units you have purchased (valued at purchase price) subject to a maximum limit of Rs. 5 lakhs till your child attains the age of 18, you as the parent / guardian.
- Scholarship programme aiming to provide financial assistance to deserving and meritorious students to pursue their higher education (entirely at the discretion of the Trustee).
- Equity exposure upto 65% which would give much higher yield in long term.
Plans Offered
Your investment needs may be different depending on the age of your child and 2 plans are available as per your requirement.
Gift Plan
Consider this plan if your child is in the age group of 1-13 years and you are looking to save over a long term horizon. As we all know, equity investments have potential to perform better if invested for a long term. So this plan invests 65-100% of your money in equity and equity related securities. The other 0-35% is invested in Debt Securities, Money Market Instruments, Securitised Debt & Cash to lend stability to your investments
Study Plan
If your child is between 13 & 17 years and on the threshold of higher studies, then a lot of large expenses are just around the corner. Since your horizon is smaller and you need to be more sure of what your money can bring you, 75-100% is invested in debt securities, money market instruments, securitised debt & cash, while 0-25% is put in equity to provide you with the benefit of equity investing
Other Features
Entry load (under both the plans): NIL
Exit Load - Gift Plan: (a) If the amount, sought to be redeemed or switched out, is invested for a period upto three years from the date of allotment: 1% of the applicable NAV. (b) If the amount, sought to be redeemed or switched out, is invested for a period of more than three years from the date of allotment: Nil.
Exit Load - Study Plan: (a) If investment is redeemed within 3 years: 1% of the applicable NAV. (b) If investment is redeemed after 3 years but before the Unitholder attains the age of 18: Nil. (For SIP/STP): 1.00% of applicable NAV if investment is redeemed within 3 years from the date of allotment, Else: Nil.
Cumulative Option: Allows the income you earn to remain invested which will reflect in the NAV.
Minimum amount you can invest: The minimum application amount is Rs. 5,000 (plus in multiples of Re.1 thereafter).
The minimum amount you can withdraw: Rs. 1000.
