Gifts That Grow: Diwali Mutual Fund Gifting Guide

financialexpress.com:

During the festivities in India, the concept of gifting is deeply rooted in tradition and plays a significant role in strengthening relationships and celebrating special occasions. Now that Diwali is at the door, you might be considering purchasing a gift that would bring smiles to the faces of your loved ones. However, why not gift something that is long-lasting and will help to make their future financially strong?

Gifting a mutual fund is something that will make your loved one cherish it over a long period of time. It is likely to be a life-changing experience for the recipients and can help them fulfil their financial goals in the future. Now, let us delve into some steps that you can follow to gift mutual funds to your loved ones.

This Diwali, instead of giving cash to your near and dear ones, you can invest the money in their name in mutual funds. There are two ways you can initiate the process: either through a lump-sum systematic transfer plan (STP) or through a systematic investment plan (SIP). Today, there are several attractive equity mutual funds that could deliver lucrative returns in the future, making them a gift that will grow with time. One must always stay in touch with their broker to get financial advice on these types of investments.

A recent circular issued by the Securities Exchange Board of India (SEBI) stated that investments can now be made from the minor’s joint account with a parent or legal guardian, as well as from the minor’s bank account. This makes it possible to gift mutual funds to your children as well as your grandchildren. However, one must also understand that the investments in the minor’s name will not have any joint owners, and as soon as the person turns 18, they will be the