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News Topical, Digital Desk : Due to the attractive returns offered by mutual funds, everyone wants to invest in them. Mutual funds typically offer a minimum return of 12 to 14 percent. While there are many options for investing, most people choose SIPs for mutual fund investments.
Today, we'll find out how much a monthly SIP of ₹6,000 will generate after 12 years. Let's look at the calculations.
calculation
- Investment amount – Rs 6000 per month
- Return – 12%
- Investment period – 12 years
If an investor invests Rs 6,000 every month for 12 years, they will receive Rs 19,34,000 at a 12% return . Over these 12 years, your principal alone will be Rs 8,64,000. You will receive Rs 10,70,000 in interest alone.
Everyone invests in a SIP with a purpose, such as for a child's future, marriage, etc. Let's explore the important points to keep in mind if you want to start a SIP for your child.
Parents can start a SIP for their child without any hassle. Every mutual fund allows starting an SIP in a child's name. There is no limit on the investment amount. Please note that the child must be the sole holder of the portfolio.
You can open a 3-in-1 account (bank + trading + demat) in your child's name. Children under 18 can also invest in the stock market. However, parents remain responsible for this.
Which documents are required?
- If you start a mutual fund in a child's name, you'll need to provide certain documents. First, you'll need to provide proof of age. You can provide a birth certificate or passport for this.
- You'll also need to state your relationship with the child, and the parents must comply with KYC rules.
- The money is deducted from the parent's account until the child turns 18, so a third party declaration form needs to be filled.
- Parents will have to provide their important documents like bank details, PAN card etc.
- You cannot add any nominee in this account.
What will happen after I turn 18?
If parents start a mutual fund SIP in their child's name, keep in mind that this SIP will stop after the child turns 18 or attains majority. Once the child reaches 18, the fund house will send a notice to the unit holder's registered address, including documents confirming the transition from a minor to an adult.
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