How to invest in Mutual fund in a minor child name?

How to invest in Mutual fund in a minor child name?

Minor children are allowed to invest in mutual Funds represented by parents or court appointed legal guardian. Minor shall be the Sole Holder of the folio and will be operated by the guardian. 

Documents required for making investment in minor child name

•  Birth certificate, Passport Copy or any officially valid documents for ascertaining date of birth and age of child.
•  Photograph of Child for identification.
• Proof evidencing the relationship of guardian and KYC Documents of guardian (PAN Card, Address proof and photograph).
• Payment Instrument from Minor account or guardian for effecting investment.

Steps to be followed for investing in Mutual Funds:

• Application for creating mutual folio along with self-attested copies of documents mentioned above shall be handed over to AMC.
• Guardian shall comply CKYC mandatory for investments in minor child.
• Only Offline applications are allowed for investment in minor child name.

Operation of mutual fund folio:

• Guardian can operate the mutual fund folio till the minor child turns 18. However, from the date of attaining majority, all transactions in the mutual fund account are freezed until the status of the folio is changed from minor to major.
• AMC can also register instructions like SIP, STP in a folio held by a minor. However, this instruction will be valid only till the date of the minor attaining majority. 

On attaining majority:

• Application form along with KYC documents for changing the status of the folio from minor to major is to be submitted to AMC.
• On CKYC Completion, Folio will be activated for further investments.
• SIP/STP instructions have to be registered again for the folio.

Mentotax recommends starting a SIP in your child name and watch the wealth grow as the child grows.

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Are you saving enough for your child future?

Are you saving enough for your child future?

Children’s day is round the corner and it will be the precise time to think about the children’s future. Children’s play a huge role in everyone life. Parents play supportive role in every phase of the child. It’s up to us to create the secure future for child by identifying the goals and planning to achieve it by investing systematically.

Mentotax has identified major financial goals for securing child future that needs to be given importance.

Short Term Goals
Goal	Amount Required Now	Time Horizon	FV	Savings Required	Invest In
Baby Functions/ First Birthday	₹ 2,00,000	1	₹ 2,10,000	₹ -16,868	Liquid & Overnight Funds/RD/FD
School Start	₹ 3,00,000	3	₹ 3,47,288	₹ -8,567	Liquid & Overnight Funds/RD/FD
Long Term Goals
Goal	Amount Required Now	Time Horizon	FV	Savings Required	Invest In
Coaching Class for NEET/IIT	₹ 3,00,000	15	₹ 6,23,678	₹ -1,248	Dynamic Asset Allocator/BAF
Children Graduation	₹ 20,00,000	17	₹ 45,84,037	₹ -6,932	Equity & Equity Diversified Funds
Children Post Graduation	₹ 35,00,000	21	₹ 97,50,869	₹ -8,649	Equity & Equity Diversified Funds
Children Marriage	₹ 75,00,000	25	₹ 2,53,97,662	₹ -13,518	Equity & Equity Diversified Funds

There are various avenues to invest for child future, Recurring Deposit, Fixed Deposit, Sukanya Samriddhi Yojana, Post office savings, Mutual Funds, Endowment and ULIP, Public Provident Fund, Gold, Equity Linked Savings Scheme, Child Gift Funds.

Example Child Higher Education:

Assume after 17 years you want to send your child for higher education which costs Rs 20 lakh today. To save Rs 20 lakh after 17 years, assuming a return of 12 per cent, you need to save monthly SIP of Rs 2650. But on considering inflation of 5 per cent, will bring Rs 20 lakh to Rs 8.75 lakh after 17 years. Therefore, before starting to save for your long term goal, make sure you have estimated the inflated cost and then do SIP.

In the above example, Rs 20 lakh after 17 years at an assumed 5 per cent inflation and at expected return of 12% will actually cost you Rs 45.85 lakh. Now to achieve it, you actually need to do SIP of Rs 7000 instead of Rs 2650.

Mentotax recommends you to invest in equity considering the longer time horizon. Mentotax suggests you consider inflation, expected return based on the products before starting the investment. To achieve the financial goals and secure the child futures start investing early and enjoy the benefits of compounding.

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Liquid Funds are not so liquid anymore!

Liquid funds are debt funds that invest money in short-term market instruments such as treasury bills, government securities and call money. These funds invest in instruments up to maturity of 91 days. Liquid Funds are the best avenue to park idle funds, where investor can earn better returns with low risk.

Liquid funds were offering liquidity for the investments without any restriction on exit load. The Securities and Exchange Board of India (Sebi) has introduced graded exit load structure on liquid funds. From now all the investments withdrawn before seven days from date of allotment attracts exit load as per the schedule.

Days	Day 1	Day 2	Day 3	Day 4	Day 5	Day 6	FromDay7
Exit Load	0.0070%	0.0065%	0.0060%	0.0055%	0.0050%	0.0045%	NIL

Graded exit load was imposed to regulate the inflows and outflows of funds by Institutional investors. This move will reduce the risk for the retail investors.

Liquid Funds are best for parking the emergency corpus with minimal risk and better returns. Mentotax advises to invest in liquid funds only if you can hold more than 7 days. Enjoy more liquidity with Overnight funds.

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New Fund Offer

Money Management for Newly Married Couple

Marriage is an life time and Important event of one's life. Marriage is Two individuals coming together to build life together. Both people may come from different background with different opinions, but they need to be in  liason with each other in all aspects especially Money.Marriage means sharing life goals, aspirations, commitments, assets and liabilities and finance.

Here are the few steps which will help the newly married couple to plan their money wisely:

Start Talking About Money:

It is always important to discuss about money with your new spouse as soon as possible after marriage. Everyone will have their own methods of spending, savings and investment. Now both must sync together for better money management.

Discuss Current Financial Situation:

Sit down together and discuss the current financial position. How much income both are earning? How much they can spend based on the spending habits?  Discuss about the personal debts they have together? How much they have saved and invested over the years? Be open and transparent with your spouse on money. Spend some time to discuss about desires, dreams and needs at the beginning stage itself.

Discuss about Financial Roles:

Clearly defining the financial roles among newly married couple will resolve lot of problems. "Who will be doing what" this should the point of discussion with the newly married couple. Think home is also similar to your career, you have to do the specific and Special tasks to achieve your goals and you have to tackle all the your obstacles. Know the strength and weeknesses of both and compare with eachother and assign tasks.

Note Down Your Life Goals:

For a newly married couple, Individuals goals will inturn become a common goal. Discuss with the spouse and jot down all goals. Like purchasing a house, Foreign Vacation, Retirement. Fund your goals together and review them periodically.

Converse about Bank Accounts:

Have separate account individually and Joint account together. Individual accounts can be used to get all credits like salary and Have a joint account to manage all your hold expenses and making Investments for your goals. Manage your money in effective way.

These things will make newly married couple to manage their money wisely.

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e-Insurance Account

e-Insurance account is more or less like a demat account, where one can store all the insurance policies (Life, Health, General ) in a single account in electronic form. e-Insurance account helps the individuals to hold multiple policy of different companies in single account, pay premiums, track of all policies in one place. e-Insurance account has to be opened with Insurance Repositories.

IRDAI has permitted following four entities to act as 'Insurance Repositories' that are authorized to open e-Insurance Accounts. Insurance Repositories will provide 13 digit unique eInsurance account number to individuals.

• NSDL Database Management Limited
• Central Insurance Repository Limited
• Karvy Insurance Repository Limited
• CAMS Repository Services Limited

Opening an e-Insurance Account:

Step 1: Download eInsurance Account opening form of your preferred Insurance Repository.

Step 2: Fill the form and attach self-attested copy of KYC documents.

Step 3: Submit the forms along with self-attested documents to your preferred insurance repository.

Benefits of e-Insurance Accounts:

•         One time Know Your Customer updation for all policies.
•          Storage of all policy in electronic format - Paperless Policies.
•          Safe against theft or loss of physical policies.
•          Consolidated insurance statement on an annual basis.
•          Single request for contact details updation
•          Premium alerts & payment for all insurers through eIA
•          Ease in registering bank account details for premium payment and payouts
•          One Time Claim Intimation in case of any unfortunate event

Once e-Insurance account is opened with any of the Insurance Repositories, All the new policies and Existing policies can be stored in electronic form.

Mentotax recommends to open e-Insurance account with any of the Insurance repositories and convert all the existing policies to electronic form for easy tracking and other benefits.

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Financial Lessons from Mom!

Financial Lessons from Mom!!

Mother's are the back bone of the family!! She is the pillar of support and decision maker!! Mother's are always awesome in budgeting and in teaching kids about money.

Few Financial Lesson we can learn from our mother.

* Creating Budget:
Moms are best at creating budget, she knows where to spend the money and where to cut the expenses on forehand and prepares the budget accordingly. She teaches us the best way to budget.

*Live with what we have:
Mom are best and can adjust to live with what they have without sacrificing the needs of family. They don't take loans or use credit cards for monthly expenses. We should learn from moms to live with what we have.

* Save for future:
Moms always see ahead. She plays key role in family expenses and helps in savings. She keeps aside some money from her house expenses for emergencies. She saves in her kitchen jars and piggy banks. She inculcates savings habits in kids.

* Setting Financial Goals:
Moms are best in setting financial goals and acheiving it. She knows what is required for family. She starts saving and investing for goals. She keeps her kids to involve in acheiving the financial goals.

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Transform your SIP to Top Up SIP

Transform your SIP to Top Up SIP:

Top Up SIP is a facility provided by the asset Management Company (AMC) where by investor can increase the SIP amount by fixed amount or by specified percentage at predetermined intervals. SIP is an effective tool to build wealth. Whereas Top Up SIP will enable to achieve your goals faster and accumulate wealth quicker.

Example: Deepan wishes to save for child marriage which is 20 years from now. He decides to start a SIP of Rs 5000 per month in equity funds. He has predicted that fund will give return upto 12% pa . He will be able to build a corpus of Rs 46 Lakhs after 20 years to achieve his goal.

If Deepan decides to Top Up his SIP Investment by 10% every year. He will be able to accumulate the same wealth in just 16 years. He can save 4 years by just Topping Up his existing SIP by 10%.

He will be invest Rs 5000 in first year, Rs 5500 in second year, Rs 6050 in the third year and so on.

If he is investing for 20 years with top up of 10% to his existing SIP. He can accumulate corpus of Rs 92.5 Lakhs by end of the term. He can build wealth almost double the corpus of simple SIP by topping up just 10%.

Advantages of Top Up SIP:

1) Helps to acheive the goals faster

2) Easy to manage the portfolio.

3) Helps to beat the inflation

4) Helps to Increase the Savings

5) Adopts to your rising income

Mentotax recommends you to Top Up your existing SIP by at least 10% every year to achieve your goals faster and enjoy the power of Compounding.

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Overnight Funds

Overnight Funds are the debt funds that invest in bonds, money market instruments that mature in one day. Overnight Funds are introduced under debt funds by SEBI in new categorisation of mutual funds. Overnight Funds are the best avenue for parking your idle money, where investor can earn better returns with low risk or with even no risk.

Overnight Funds invest collateralised borrowings and lending obligation (CBLO), bonds, repo, corporate bond repo, short term borrowings backed by government, money market instruments like treasury bills, CD, CP with one day maturity. When securities mature, fund reinvestment the proceeds in next set of one day instruments. At the beginning of everyday, overnight mutual fund will have new portfolio.

Returns from the overnight for will reflect the overnight lending and borrowings rates in the market. Investor can purchase the units of overnight funds in previous day NAV if invested before 1PM of the day. Overnight funds doesn't carry any service tax, transaction tax, brokerage etc.

Mentotax recommends to utilise Overnight Funds to park your Emergency corpus with very merger risk and to invest your idle money to earn better returns even for one day.

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How to select financial advisor?

How to select financial advisor?

Financial advisors play a pivotal role in investment and financial journey of individuals. They help in acheiving life goals of the person by selecting accurate product based on the risk profile. Choosing a best financial advisor can change your finances. Financial advisors suggest you how to best save, invest, and grow your money.

Mentotax suggests you look for a professional with the following certifications. Financial advisors may have different certifications and experience but the following are considered to be best in the industry.

AMFI Registered Mutual Fund Advisors: Assocoation of Mutual fund in india in order to promote best practices and ethical standards in the business of sale of Mutual Fund scheme has formulated  guidelines to financial advisors. These code of conduct and best practices ensure high standards of services to investors. AMFI Registered mutual fund advisor is qualified person to distribute mutual funds.

SEBI Registered Investment Advisor (RIA): Market Regulator -Securities and Exchange Board of India (SEBI) has taken various steps to segregate distribution and advice. SEB has rolled out with Investment Advisers Regulations in 2013. RIA registered with SEBI is compensated only through the fee paid by the investor. This ensures that the RIA protects the interest of the investors. Financial Advisor needs to complete any certification prescribed by SEBI to register as RIA.

CFP (FPSB): Certified Financial Planner Certification is granted to individuals who meet the stringent standards of education, examination, experience and ethics set by FPSB India. FPSB India is the principal licensing body that awards CFP Certifications. CFP (Certified Financial Planner) is generally considered the gold standard in the industry.

Mentotax recommends to choose your financial advisor with these professional qualifications and select wisely for financial independence.

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How to Open NPS Account Online??

How to open NPS account online?

Mentotax is here to help you out with step by step process to open NPS account online using your PAN card.

Step-1: Visit eNPS Portal:

The first step is to visit eNPS portal
https://enps.nsdl.com/eNPS/NationalPensionSystem.html

Click on National Pension System and select “Registration” to open NPS account

Step-2: NPS subscriber registration:

New registration -> Individual subscriber -> Citizen of India and Tier-I only will be selected automatically and proceed to enter your PAN card and then select your bank.

Step-3: Subscriber registration core details:

Subscribers need to enter his or her personal details. Details like Email ID, Mobile number and Date of Birth, Proof ID etc. are mandatory fields. Click on “Generate Acknowledgement No” after filling all mandatory fields.

Step-4: Acknowledgement Number Generation:

If your name provided for NPS registration matches with name as per PAN records. It will allow you to proceed. You will get “Acknowledgement Number”

Step-5: Update contact details:

Complete FATCA details, second is correspondence Address and the third and final one is permanent address details. Click on “Save and Proceed”

Step-6: Update Bank and other details:

Select occupational details, fill bank details and then proceed

Step-7: Update Nomination and Scheme Preference Details:

Step-7.1.1: Update Scheme Preference Details

There are two sub-sections. First is Fund manager selection and second Investment choice.

Firstly, you have to choose your pension fund manager from the list of 8 fund managers.

Step-7.1.2 After selecting fund managers, choose your choice of investment: There are two choices of investment, Active Choice and Auto Choice

ACTIVE CHOICE:

Subscribers can decide allocation of money for investment in 3 assets classes. There classes are E (Equity), C (Corporate debt), G (Government Bonds)

AUTO CHOICE:

This is “Life Cycle Fund” and a very easy option for subscribers

There are three sub-choices: Moderate, Conservative and Aggressive. Allocation of fund for equity is highest in “Aggressive” and lowest for “Conservative”

Step-7.2: Update Nomination details:

Fill nominee details, like name, DOB, relationship and proceed

Step-8: Documents upload:

Upload scanned copy of PAN card and cancelled cheque. Maximum allowed size of file is 4 MB and minimum is 4 KB.

Step-9: Photo and signature upload:

Upload your photo and scanned copy of your signature. File size must be in the range of 4 KB to 12 KB.

Step-10: Payment Details:

You must make the first investment in your NPS account to get the PRAN number. Minimum investment amount is INR 500 for Tier-I and INR 1000 for Tier-II account. Payment Confirmation along with PRAN (Permanent Retirement Account Number) will be sent to mail.

You need to download the form. Print and stick your photo, sign the form and then send it to NSDL within 90 days.

Mentotax recommends you to Invest in NPS to save tax and create to retirement corpus. Mentotax advises to invest via auto choice for risk mitigation and better returns.

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