POSTED BY kubertrading ON February 7, 2012 12:03 pm COMMENTS (2)

I have a small problem can you help me to slove this? My brother and myself have 1 daughter & 1 son EACH

My dad wants to invest rs:10000= for his grand children,that is rs:40000/=

He also wants to avail tax benifiets in his books

my dad’s age is 73 years

our children ages are

daughters: 18 & 16

sons: 13 & 14

PLease advise and oblige.




2 replies on this article “WHERE TO INVEST TO GET MAX RETURNS?”

  1. Dear Sanjay, your father can’t avail tax benefit under section 80C for the investments done in the name of his grand children. He should invest in his own name & to ensure that the money is meant for the respective grand children, he may invest in Tax saver FDs of banks & being a Sr. citizen he is eligible for a higher rate. He may either nominate his grand children for each of 10K FD or may open joint ones with the grand children.

    Take your own pick.



  2. BanyanFA says:

    Hi Sanjay,
    I am assuming that you mean rebate u/s 80C (1 lac limit) by tax benefit. This benefit may be taken away after year ending 31 March 2012 and hence this may be the last year to take such benefit. Further, the investment selection depends upon the duration of the investment.

    There are a couple of infrastructure bonds which are going on these days with a 15 year time horizon. 15 Years provides a good time frame to achieve good returns via Power of Compounding.

    You could also park your funds in high interest yielding Fixed Deposit – for a period of 5-10 years – however these won’t be tax efficient.

    If you can do away with the Tax benefit, the better options is to invest the funds via SIPs into Mutual Funds over a 10-12 months period (i.e. Rs. 1000 per month for 10 months per child) – assuming that your children don’t intend to have these funds in short term (less than 2-4 years duration). Mutual Funds would end up giving a better return over 10 year period in comparison to Fixed Deposits.


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