A Father’s Day Special!

Dad is another name for love!

This Father’s Day, let us embrace the immeasurable love and bond shared between fathers and their children!

Father – The Unconditional Supporter

Throughout fatherhood, they don multiple hats –

Their journey begins as soon as their children are born, as they help them take their first baby steps
Consequently, at every juncture – be it during exams or during vacations – fathers ensure a stable and safe atmosphere for their children to flourish
While showering their unconditional love, they play a vital role in securing their children’s bright future in order to fulfill their dreams. They sacrifice certain pleasures of life, and make wise spending choices to save up for tomorrow. In a manner of speaking, they are investing in their children!

Father – The Leader by Example

By saving for tomorrow, fathers attempt to display fiscally responsible behaviour. While they display such behaviour, they simultaneously set an example for children to learn from

Fathers discuss their financial decisions with their children, explain the rationale behind those decisions, and emphasize their thoughts behind long-term financial planning. This inspires their children to develop healthy financial habits, and make informed financial decisions

As a father, are you leading by example in the correct manner?

Generally, when saving for your child’s future, there are certain decision points that you may have to ponder over in order to meet their aspirations effectively

How much to save?

Your child's education is one of your most important financial goals
Whether it is MBBS, MBA or Engineering, premier institutes charge a premium
Or, your child may aspire to study abroad
And the cost of education typically rises faster than average inflation
Being prepared is the key
So, the answer to the question is “as much as you can”

Is just ‘saving’ enough?

You need to have the ‘investing’ mindset, rather than just ‘saving’
SIP (Systematic Investment Plan) is a great way to make investing a regular habit
Equities have the potential to grow at a higher rate over the long term. So, it is ideal to have some equities in your financial plan for your child
HDFC Children’s Gift Fund is a tailor-made solution to build corpus for children
Therefore, this Father’s Day, let your love as a father transcend beyond the traditional gifts, and start a SIP in HDFC Children’s Gift Fund

Why HDFC Children's Gift Fund?

Meant for all children below the age of 18 years

Healthy allocation towards equities which is an ideal long-term asset class coupled with debt allocation which provides stable returns

Investments can be made on a lump sum or SIP basis and there is no limit to the number of transactions in any given year. No maximum limit on investment

However, note that there is a mandatory lock-in period for investments in the scheme

Benefit from the long-term potential of equity while maintaining the stability of debt

Since its inception in March 2001, the Scheme has delivered a Compounded Annual Growth Rate (CAGR) performance of 16.11%* - a rate of return that would have comfortably beaten inflation and overall rise in cost of education (Refer chart below)

An Illustration

Imagine a father who would have invested INR 2 lakh for his child in HDFC Children’s Gift Scheme in 2001, in anticipation that his child would go for an MBA this year. Over a period of over 22 years, that amount would have compounded to INR 56 lakhs – an amount that would have been comfortable enough for you to cover your child’s cost of doing an MBA in a top tier Indian Institute today!

Source: Inflation data as on May 31, 2023– Reserve Bank of India, *Returns of HDFC Children’s Gift Fund are since inception (till May 31, 2023), Information on education as made available by reputable educational institutions in public domain, DNA India. Cost in 2006 based on the education cost incurred for Masters in Business Administration. Y-o-Y hike in fees for MBA from 2002 to 2006 assumed to be 12%.

Disclaimer: HDFC Mutual Scheme/ HDFC AMC is not indicating or guaranteeing returns on any investments. Readers should seek professional advice before taking any investment related decisions.

Past Performance may or may not be sustained in the future.