Can I gift a mutual fund to my child?

Yes, you can invest in a children’s mutual fund in your child’s name, making it an ideal financial gift with long-term benefits.

Is there any requirement for investing in Children’s Funds?

To invest, the child must be a minor at the time of application. The investment must be made by a parent or legal guardian.

Which is better – a Child Insurance Plan or a Children’s Mutual Fund?

Children’s mutual funds offer market-linked growth potential and flexibility, while child insurance plans focus more on protection. For wealth creation, mutual funds are often preferred.

What is the ideal time to start investing in a Children’s Mutual Fund?

The earlier, the better. Starting when your child is young gives the investment time to grow and benefit from compounding.

Are there any penalties for early withdrawal from a Children's Mutual Fund?

Yes, most funds have a strict lock-in till the child turns 18. Early withdrawal may attract exit loads and tax implications.

What is the risk rating of Children’s Mutual Funds?

The risk varies based on asset allocation. Funds with higher equity exposure carry higher risk, while those with balanced portfolios are moderately risky.

Childrens Mutual Funds

Children’s Mutual Funds are specially designed to help parents or guardians plan for a child’s long-term financial future. These funds focus on building a disciplined savings habit for life goals such as higher education, career development, or marriage. Unlike general-purpose mutual funds, children’s funds often come with a lock-in period of around 5 years and use a mix of equity and debt to balance growth with stability.

The idea is simple—start early, invest consistently, and build a secure corpus by the time your child needs it most. Whether you’re looking to save for school fees or planning for college abroad, investing in children’s mutual funds can help you stay financially prepared without stress.

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List of Childrens Mutual Funds

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Search Result - 14 Mutual Funds

Fund Name	Fund Size (Cr.)	3Y Returns	5Y Returns

Fund Name	1Y Returns	Rating	Fund Size (Cr.)

What is the Purpose of Children’s Fund?

Children’s Mutual Funds are created to help parents accumulate a financial cushion for their child’s future. These funds typically lock investments until the child turns 18 or come with a 5-year lock-in period, ensuring that the money is used only when truly needed. Whether it's planning for education or marriage, children's funds aim to provide peace of mind through structured, long-term investing.

Features of Children’s Funds

Goal-Oriented Design: Children’s Mutual Funds are structured around key life goals, such as education or wedding expenses. The funds maintain a long-term focus aligned with your child’s future needs.
Equity-Debt Allocation: Another Children’s Mutual Funds feature is that it generally invests in a combination of equity for growth and debt for stability, offering a balanced risk profile suitable for extended time horizons.
Mandatory Lock-In Period: One unique feature of children’s funds is the minimum 5-year lock-in or until the child turns 18, whichever is later. This ensures disciplined investing and protects the corpus from impulsive withdrawals.
Nominee and Minor Holding Facility: Children’s mutual funds allow parents to invest on behalf of a minor with the option to transfer ownership once the child reaches legal age.

Who Should Invest in Children’s Mutual Funds?

Parents with Young Children: If you have a child under 10, now is the ideal time to begin Children’s Mutual Fund investment. Early planning maximises compounding. So, the earlier you invest in Children’s Mutual Funds, the better.
Guardians Planning for Specific Goals: Children’s funds in India are ideal for those saving for specific milestones such as higher education, boarding school, or international studies.
Investors with a Long-Term Outlook: These funds are best suited for individuals who can stay invested for 10+ years and are comfortable with short-term market fluctuations.
Risk-Aware Investors: Children’s mutual funds may involve equity exposure, so they suit moderately risk-tolerant investors aiming for growth while safeguarding capital.

How to Invest in Children’s Mutual Funds?

Visit 5paisa: Start by creating a free account on 5paisa—India’s trusted platform for mutual fund investments.
Complete KYC Process: Upload PAN, Aadhaar, and bank details for KYC verification to begin your children's mutual fund investment journey.
Search for the Best Children’s Mutual Funds: Use filters like risk profile, lock-in duration, and historical performance to find the best children’s mutual funds in India.
Evaluate Fund Options: Look into fund strategy, expense ratio, and portfolio mix to make informed decisions based on your financial goals.
Invest Easily via SIP or Lumpsum: Choose the investment mode that suits you. Whether you prefer monthly SIPs or a one-time lump sum, 5paisa enables smooth and paperless investing.

Factors to Consider While Investing in Children’s Funds

Lock-In Period: Most children's funds require a lock-in until the child turns 18 or for at least five years. This ensures long-term discipline but limits liquidity.
Exit Load: Some funds may impose an exit load if withdrawn prematurely. Check this before you invest in Children’s Mutual Funds, especially if you foresee early financial needs.
Cost of Children’s Funds: While many children’s mutual funds come with reasonable expense ratios, review fund documents to ensure the cost justifies the return potential.
Fund Type & Risk Exposure: Evaluate whether the fund is equity-heavy or balanced. Choose one that fits your time horizon and risk tolerance.
Fund Manager Track Record: The success of a children’s mutual fund investment often depends on the fund manager’s ability to handle market cycles effectively.

Who Are These Funds Suited For?

Young Families Planning Ahead: Perfect for parents of toddlers or school-age children who want to build a solid financial base for the future.
Grandparents or Guardians: These funds are also ideal for grandparents or legal guardians looking to gift a meaningful investment that supports the child’s education or life goals.
Investors Looking for Locked Savings: If you're someone who struggles with impulsive withdrawals, the long lock-in makes these funds ideal for enforced savings.

What are the Advantages of Investing in Children’s Funds?

Customised Child Investment Plans: Children’s funds are specifically designed with child-centric goals, allowing better alignment with future education or marriage expenses.
Mix of Debt and Equity: These funds offer diversification across asset classes, reducing volatility while allowing potential for long-term capital appreciation.
Tax Benefits: While not always eligible under Section 80C, some children’s mutual funds qualify. Check this Children Mutual Fund benefit before choosing a particular fund.

Risks Involved with Children’s Funds

Extended Lock-In Period: Since the funds are locked till the child turns 18, early access is restricted—posing a risk if financial emergencies arise.
Possible High Volatility (Equity Exposure): Funds with higher equity allocation may experience market volatility, especially in the short term.
No Guaranteed Returns: As with all market-linked investments, children's mutual funds do not promise fixed returns. The outcome depends on market cycles and fund strategy.
Credit Risk in Debt Portion: Debt exposure in children’s funds carries a credit risk if the fund invests in low-rated or volatile debt instruments.

Taxability of Children’s Mutual Funds

When it comes to Children’s Mutual Funds, tax treatment is relatively favourable. The interest earned during the investment period is generally exempt from tax. Tax is applied only when the investment matures and the final amount is withdrawn, allowing the benefits of indexation to apply and potentially reduce the overall tax burden.
Parents investing in Children's Funds in India may also be eligible for a deduction under Section 80C of the Income Tax Act, with a maximum limit of ₹1.5 lakh per financial year. This can significantly enhance the fund’s long-term tax efficiency.
Additionally, under Section 10(32), parents can claim an annual exemption of ₹1,500 per child if the interest income generated exceeds ₹6,500 in a year.
For parents of children with specific disabilities, further tax benefits may be available, helping ease the financial burden while securing the child’s future through structured, long-term investment planning.

Popular Childrens Mutual Funds

Fund Name
Min Investment Amt
AUM
3Y Returns

Childrens Mutual Funds

Kickstart your SIP journey with just ₹100!

List of Childrens Mutual Funds

Category

Sub Category

Rating

What is the Purpose of Children’s Fund?

Features of Children’s Funds

Who Should Invest in Children’s Mutual Funds?

How to Invest in Children’s Mutual Funds?

Factors to Consider While Investing in Children’s Funds

Who Are These Funds Suited For?

What are the Advantages of Investing in Children’s Funds?

Risks Involved with Children’s Funds

Taxability of Children’s Mutual Funds

Popular Childrens Mutual Funds

SBI Children's Fund - Investment Plan-Dir Growth

₹ 500

₹ 5,0660

23.47%

Min SIP Investment Amt

₹ 500

AUM (Cr.)

₹ 5,066

3Y Return

23.47%

ICICI Pru Children's Fund - Direct

₹ 100

₹ 1,4180

18.03%

Min SIP Investment Amt

₹ 100

AUM (Cr.)

₹ 1,418

3Y Return

18.03%

Aditya Birla SL Bal Bhavishya Yojna - Dir Growth

₹ 500

₹ 1,2060

15.89%

Min SIP Investment Amt

₹ 500

AUM (Cr.)

₹ 1,206

3Y Return

15.89%

HDFC Children's Fund - Direct Growth

₹ 100

₹ 10,6150

15.15%

Min SIP Investment Amt

₹ 100

AUM (Cr.)

₹ 10,615

3Y Return

15.15%

UTI-Children's Equity Fund - Direct Growth

₹ 500

₹ 1,1760

14.55%

Min SIP Investment Amt

₹ 500

AUM (Cr.)

₹ 1,176

3Y Return

14.55%

UTI-Children's Equity Fund - Direct (Scholarship)

₹ 500

₹ 1,1760

14.55%

Min SIP Investment Amt

₹ 500

AUM (Cr.)

₹ 1,176

3Y Return

14.55%

Tata Children's Fund - Direct

₹ 500

₹ 3650

13.04%

Min SIP Investment Amt

₹ 500

AUM (Cr.)

₹ 365

3Y Return

13.04%

SBI Children's Fund - Savings Plan-Dir Growth

₹ 500

₹ 1320

12.42%

Min SIP Investment Amt

₹ 500

AUM (Cr.)

₹ 132

3Y Return

12.42%

AXIS Children's Fund - No Lock in - Dir Growth

₹ 1000

₹ 9220

12.36%

Min SIP Investment Amt

₹ 1000

AUM (Cr.)

₹ 922

3Y Return

12.36%

AXIS Children's Fund - Lock in - Dir Growth

₹ 1000

₹ 9220

12.18%

Min SIP Investment Amt

₹ 1000

AUM (Cr.)

₹ 922

3Y Return

12.18%

Other Calculators

FAQs

Can I gift a mutual fund to my child?

Is there any requirement for investing in Children’s Funds?

Which is better – a Child Insurance Plan or a Children’s Mutual Fund?

What is the ideal time to start investing in a Children’s Mutual Fund?

Are there any penalties for early withdrawal from a Children's Mutual Fund?

What is the risk rating of Children’s Mutual Funds?

Open Free Demat Account

Childrens Mutual Funds

Kickstart your SIP journey with just ₹100!

List of Childrens Mutual Funds

Category

Sub Category

Rating

What is the Purpose of Children’s Fund?

Features of Children’s Funds

Who Should Invest in Children’s Mutual Funds?

How to Invest in Children’s Mutual Funds?

Factors to Consider While Investing in Children’s Funds

Who Are These Funds Suited For?

What are the Advantages of Investing in Children’s Funds?

Risks Involved with Children’s Funds

Taxability of Children’s Mutual Funds

Popular Childrens Mutual Funds

SBI Children's Fund - Investment Plan-Dir Growth ₹ 500 ₹ 5,0660 23.47% Min SIP Investment Amt ₹ 500 AUM (Cr.) ₹ 5,066 3Y Return 23.47%

ICICI Pru Children's Fund - Direct ₹ 100 ₹ 1,4180 18.03% Min SIP Investment Amt ₹ 100 AUM (Cr.) ₹ 1,418 3Y Return 18.03%

Aditya Birla SL Bal Bhavishya Yojna - Dir Growth ₹ 500 ₹ 1,2060 15.89% Min SIP Investment Amt ₹ 500 AUM (Cr.) ₹ 1,206 3Y Return 15.89%

HDFC Children's Fund - Direct Growth ₹ 100 ₹ 10,6150 15.15% Min SIP Investment Amt ₹ 100 AUM (Cr.) ₹ 10,615 3Y Return 15.15%

UTI-Children's Equity Fund - Direct Growth ₹ 500 ₹ 1,1760 14.55% Min SIP Investment Amt ₹ 500 AUM (Cr.) ₹ 1,176 3Y Return 14.55%

UTI-Children's Equity Fund - Direct (Scholarship) ₹ 500 ₹ 1,1760 14.55% Min SIP Investment Amt ₹ 500 AUM (Cr.) ₹ 1,176 3Y Return 14.55%

Tata Children's Fund - Direct ₹ 500 ₹ 3650 13.04% Min SIP Investment Amt ₹ 500 AUM (Cr.) ₹ 365 3Y Return 13.04%

SBI Children's Fund - Savings Plan-Dir Growth ₹ 500 ₹ 1320 12.42% Min SIP Investment Amt ₹ 500 AUM (Cr.) ₹ 132 3Y Return 12.42%

AXIS Children's Fund - No Lock in - Dir Growth ₹ 1000 ₹ 9220 12.36% Min SIP Investment Amt ₹ 1000 AUM (Cr.) ₹ 922 3Y Return 12.36%

AXIS Children's Fund - Lock in - Dir Growth ₹ 1000 ₹ 9220 12.18% Min SIP Investment Amt ₹ 1000 AUM (Cr.) ₹ 922 3Y Return 12.18%

Other Calculators

FAQs

Can I gift a mutual fund to my child?

Is there any requirement for investing in Children’s Funds?

Which is better – a Child Insurance Plan or a Children’s Mutual Fund?

What is the ideal time to start investing in a Children’s Mutual Fund?

Are there any penalties for early withdrawal from a Children's Mutual Fund?

What is the risk rating of Children’s Mutual Funds?

Open Free Demat Account

SBI Children's Fund - Investment Plan-Dir Growth

₹ 500

₹ 5,0660

23.47%

Min SIP Investment Amt

₹ 500

AUM (Cr.)

₹ 5,066

3Y Return

23.47%

ICICI Pru Children's Fund - Direct

₹ 100

₹ 1,4180

18.03%

Min SIP Investment Amt

₹ 100

AUM (Cr.)

₹ 1,418

3Y Return

18.03%

Aditya Birla SL Bal Bhavishya Yojna - Dir Growth

₹ 500

₹ 1,2060

15.89%

Min SIP Investment Amt

₹ 500

AUM (Cr.)

₹ 1,206

3Y Return

15.89%

HDFC Children's Fund - Direct Growth

₹ 100

₹ 10,6150

15.15%

Min SIP Investment Amt

₹ 100

AUM (Cr.)

₹ 10,615

3Y Return

15.15%

UTI-Children's Equity Fund - Direct Growth

₹ 500

₹ 1,1760

14.55%

Min SIP Investment Amt

₹ 500

AUM (Cr.)

₹ 1,176

3Y Return

14.55%

UTI-Children's Equity Fund - Direct (Scholarship)

₹ 500

₹ 1,1760

14.55%

Min SIP Investment Amt

₹ 500

AUM (Cr.)

₹ 1,176

3Y Return

14.55%

Tata Children's Fund - Direct

₹ 500

₹ 3650

13.04%

Min SIP Investment Amt

₹ 500

AUM (Cr.)

₹ 365

3Y Return

13.04%

SBI Children's Fund - Savings Plan-Dir Growth

₹ 500

₹ 1320

12.42%

Min SIP Investment Amt

₹ 500

AUM (Cr.)

₹ 132

3Y Return

12.42%

AXIS Children's Fund - No Lock in - Dir Growth

₹ 1000

₹ 9220

12.36%

Min SIP Investment Amt

₹ 1000

AUM (Cr.)

₹ 922

3Y Return

12.36%

AXIS Children's Fund - Lock in - Dir Growth

₹ 1000

₹ 9220

12.18%

Min SIP Investment Amt

₹ 1000

AUM (Cr.)

₹ 922

3Y Return

12.18%