Nikhil’s father lives independently pension that he receives. He manages to save some amount every month after his medical needs and emergencies Fund are provided for. He invests this surplus in a recurring deposit, and also holds some corpus in National Savings Certificates and some tax saving bonds. He is seeking Nikhil’s help to bequeath his wealth to his grandchildren. Nikhil is wondering what should he keep in mind while giving suggestions to his father.


Nikhil should consider two points while making this decision: one, how to pass the fund in favor of his children, and second, how to ensure that it grows over the next 5-10 years as long as they are in it. Not enough to join. College. Transferring property as a gift should be denied because of its tax effect on income. In addition, once a gift is given, it cannot be revoked, and it may affect his father. financial security, Nikhil relies on the will as a tool to bequeath his father’s amount to his children without adversely affecting his financial security. This ensures that he has access to his assets if he needs it in his lifetime.

Nikhil will also have to make some changes in his father’s investment portfolio. He should make some allocation to equity mutual funds so that it can grow into a large corpus in the next 5-10 years due to the growth effect of equity. This switch to tax saving bonds may be possible in the near future as they are expected to mature soon. However, on an immediate basis, Nikhil can start investing the monthly surplus equity fund SIP instead of Recurring Deposit. This will ensure that in the long run, this money will grow into a corpus to meet the higher education needs of Nikhil’s children.

Content on this page is courtesy of Center for Investment Education and Learning (CIEL).
Contributions by Girija Gadre, Arti Bhargava and Labdhi Mehta.