Use ELSS as a First Step To Save for Your Child’s Future

  Author: Naveen Kumar

Equity linked saving scheme (ELSS) offered by mutual funds can not only help you save taxes but also make your money grow well thanks to the long term growth from equities in which money of investors is invested in. This investment can also help you achieve your financial goals such as child’s higher education and your retirement. Here is a quick guide on you can get use ELSS to get started with investments for your child’s future.

Earmark tax-saving investments for major future needs Early in people’s work life, typically a significant portion of investments are tax-saving investments like ELSS. It is always a smart move to earmark these investments for your future needs like child’s higher education. For instance, if you invest Rs 10,000 per month in an ELSS for 18 years, and the money grows at 12 per cent annually, you accumulate Rs 70.50 lakh.

Increase investments with pay hikes As your income increases over time, you can increase your ELSS investment amount or invest in other equity funds performing consistently over one, three and five years. In this way, you can create a mutual fund portfolio for your child’s future. 

Thus, tax saving investments in the form of ELSS can be a great first step towards saving for your child’s future needs like higher education.