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POSTED BY ON December 27, 2011 4:06 pm COMMENTS (2)
Hi,
I want to invest one time investment of 40000 – 50000 (or) annual investment of 30000 for my sister’s 1 yr baby girl. Please suggest some good options. I want to show them for my tax savings also (Gift fund).
Note: I want to make my 1st premium / Investment through credit card atleast for this time. I want to buy this month only.
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Dear Satish, Please read my reply in addition to what dear justgrowmymoney has told already. You can’t purchase a ins. policy be it ULIP or traditional for your sister’s baby, as you are a 3rd party in this case. Only the parents or grand parents of the child can purchase/invest in ins. plans for a kid. So the next question of saving tax on this prem. payment does not arise.
if you are so hard pressed, The immediate solution lies into 5Y Tax saving Bank FDs. Although the interest is taxable but the lock in period is 5Y & for the current high rate scenario, it’s a better debt based product, if you are in lower tax slab.
Thanks
Ashal
Satish:
IMPORTANT:
Dont ever buy a ULIP. No matter who sells this to you and no matter how pressed for time you are and no matter how much tax outgo will be there because you have no savings STAY AWAY FROM ULIPs. This alone will help you save a fortune over many years.
The only tax saving instrument you can buy via credit card is Insurance Plans/ULIP. Again in Insurance plans only Term Insurance/Health Insurance/Critical care insurance etc. are worth spending money on not any endowment/money back plans. And again none of these directly will help your niece. Hence you have no choice of using Credit card for the payment.
You can still go for the minimum Rs. 5000 needed to be invested in Tax Saver Mutual Funds (ELSS) like in Canara Robeco Tax Saver but I would not recommend pumping 40,000 – 50,000 in one go.
Since you are so pressed for time that you need to make the investment this month itself (Dec 2011, 4 days to go) the only option I can think of decently parking money is in PPF. May not sound attractive but it is a wise investment.