I am looking for a good investment option for my child’s future. I earn Rs.50,000 a month and my husband works with the family business. I have been investing `1 lakh in PPF for the past five years and have no other use for my income as my husband takes care of the household expenses. - Charu Kohli, Chandigarh

You have immense potential to save, optimise your tax outgo and build a sizeable corpus for your child’s future. Assuming the child’s higher education needs are at least 10 years ahead, your savings and investments should be more towards equity than fixed return instruments like PPF. Look at equity linked savings schemes, which are mutual funds, as investments in these qualify for tax deductions under Section 80C. You can choose funds from the OLM Elite list which includes funds like Franklin India Taxshield, Religare Invesco Tax Plan, Axis Long Term Equity and Reliance Tax Saver.

Once you have used the Rs.1.5 lakh limit towards tax savings, you can look for a mix of funds from the Elite list depending on your profile. Invest regularly through monthly systematic investment plans (SIP) in these funds and check their performance once a year to compare it with peers and its benchmark. It will also be prudent if you consider life and health insurance for your family. For life cover, go for a term insurance plan for both yourself and your husband and consider family health insurance for your family. This will also ensure that investments happen smoothly and will be used for their intended purpose.

OLMdesk@outlookindia.com