A Father’s Dilemma
When Raj became a father, he felt a deep sense of responsibility. Holding his newborn son, Aarav, in his arms, he promised himself, “I will give you the best future possible.”
Like any parent, he dreamed of providing Aarav with the best education, opportunities, and financial security. But when he sat down to plan, he felt overwhelmed. How much would college cost 18 years from now? How should he invest?
One evening, Raj was discussing his worries with his friend Vikram, a financial advisor. Vikram smiled and said, “Start a minor folio in Aarav’s name and let time do the work.”
What is a Minor Folio?
A minor folio is a mutual fund investment account opened in a child’s name, managed by a parent or guardian until the child turns 18. The money invested grows over the years, creating a dedicated fund for the child’s future.
Raj was intrigued. Instead of keeping his savings in a bank account or investing in traditional plans with low returns, he could start a SIP in mutual funds under Aarav’s name and let compounding work its magic.
The Journey of a ₹5,000 SIP
Vikram explained the power of compounding with a simple example:
- If Raj started a ₹5,000 SIP in an equity mutual fund when Aarav was born,
- Assuming a 12% annual return,
- By the time Aarav turned 18, the investment would grow to approximately ₹50 lakh!
Raj was shocked. ₹5,000 per month could grow into ₹50 lakh!
The Benefits of Minor Folios
- A Dedicated Fund for Your Child’s Future : The money is invested separately, ensuring it is used for your child’s education, marriage, or other important milestones.
- Tax Benefits: While earnings are clubbed with the parent’s income, strategic withdrawals after 18 can be tax-efficient.
- Disciplined Investing : A dedicated SIP builds wealth effortlessly over time.
- Power of Compounding : The earlier you start, the more you benefit.
The Payoff: Aarav’s Bright Future
Fast forward 18 years. Raj proudly watched Aarav pack his bags for college. Thanks to his early investment in a minor folio, Raj didn’t have to worry about student loans or breaking other investments. The ₹50 lakh corpus was ready, just as planned.
The Lesson: Start Today for a Secure Tomorrow
Raj’s story is a reminder that small steps today lead to a secure future tomorrow.
Are you ready to build your child’s future?
At DHM Finserv, we help parents set up minor folios and plan for their children’s dreams. Start a SIP today and give your child the gift of financial security.
