Newborn's Investment Planning | Health Insurance advice

Sumi said:

Hey everyone, got two queries for people who know better since I do have MFs but more of a SiP and forget about it person.

I have a son who's 3 months old right now and want to start a SiP or anything related like educational insurance. What would you guys suggest. I'm targeting a monthly of 2k right now as expenses are at an all-time high. Will definitely increase the said amount some months after so take that in note.

Basically, want to start investing so when he pursues higher education/business, he'll have more freedom to decide on what he wants to do

Other question is what medical insurance would be great to have, any recommendations for the family of three? (My wife, son and me)

Could I get an overall expenditure per month that would incur for this so that I can plan this out with the family.

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Put 1.5L per year in PPF for him. Its the only safe investment with near Mutual fund returns.

Medical insurance - Base policy 10L floating + 90L floating Super topup or individual ones. Can HDFC, ICICI or others of your choice. Never get anything LIC.

Party Monger said:

Put 1.5L per year in PPF for him. Its the only safe investment with near Mutual fund returns.

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nope, not even close, current rate for ppf is 7.1% and any decent index fund will easily net you atleast 10% (and this is bare minimum) and will be closer to 15% conservatively, also GST is charged on the interest earned on top interest in ppf now which reduces earnings further, PPF is a decent debt instrument and thats it

altair21 said:

nope, not even close, current rate for ppf is 7.1% and any decent index fund will easily net you atleast 10% (and this is bare minimum) and will be closer to 15% conservatively, also GST is charged on the interest earned on top interest in ppf now which reduces earnings further, PPF is a decent debt instrument and thats it

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There is no gst on PPF interest. and PPF gives post tax returns of nearly 10-11 if youre in 30% bracket.

Party Monger said:

There is no gst on PPF interest. and PPF gives post tax returns of nearly 10-11 if youre in 30% bracket.

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there is, it's not on interest, it's on interest earned on the interest of your investment

altair21 said:

there is, it's not on interest, it's on interest earned on the interest of your investment

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Bro there is no GST on any interest much less PPF interest. What are you smoking?

Party Monger said:

Bro there is no GST on any interest much less PPF interest. What are you smoking?

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yeah my bad, I opened the article I read before, I read it wrong

altair21 said:

nope, not even close, current rate for ppf is 7.1% and any decent index fund will easily net you atleast 10% (and this is bare minimum) and will be closer to 15% conservatively, also GST is charged on the interest earned on top interest in ppf now which reduces earnings further, PPF is a decent debt instrument and thats it

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2021 budget changed rules related to PF interest --> As per a proposal in the union budget, income tax will be levied on the interest earned by an individual on his/her contribution in excess of Rs 2.5 lakh in a financial year to a Provident Fund
from-> https://www.icicibank.com/blogs/investment/ppf-budget
you might be confused this with GST
PPF has max contribution of 1.5L per year, so, above rule becomes moot point, but , if OP is employed and has EPF, then, this has to be checked

for OP,
1. take term insurance for you, and if your wife is also employed, take one for her too
2. take personal health insurance floater policy for your family of 3 as @Party Monger suggested, don't just depend on your employer's. If you have one from your employer, it will be added benefit and add your parents to it as beneficiaries
3. mutual fund beats PPF , you have lots of online calculators, check for yourself, I gave few below -


SIP in mutual fund -->


PF withdrawal has specific rules , if its for education or medical emergency, then, no issues, but , if you have some other need, you cannot withdraw, but this is the beauty of PPF, that it makes you disciplined and not let take out money for trivial reasons and make the compounding do its job for 15 f'in years
link --> https://groww.in/p/savings-schemes/ppf-withdrawal