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Gulluck Plan


The objective of the scheme is to teach kids the importance of saving money through a money-saving tool which will help children in learning the art of saving for short-term and long-term goals. The plan will seek to promote a savings culture amongst children which at a later stage of their lives will lead to an increased level of financial literacy.

As a parent, you want to teach your children about investing, because in addition to putting away money for your short-term goals and long-term goals, you would like to have an account earmarked for your children. As they get older, you’ll be able to tell them that they have this account, and at a certain point, having watched it grows from a bean to a beanstalk!

How they work

A Gulluck for every Child! Through this plan, each child will be given a gulluck, and an account will be opened for them in their name. The idea is to teach children the importance of saving by having them save paisa by paisa in these gullucks, once the gulluck is filled either the children can bring the gulluck to one of MCB Funds offices or a Bachat Advisor come and collect it for depositing it into their accounts. Each time a gulluck is broken, a new gulluck will be given to the child.

Benefits of starting a Gulluck Plan

For small amounts which are regularly invested, an equity mutual fund scheme is generally preferred. Hence, the money will be invested in Alhamra Islamic Stock Fund, an equity scheme. Investing small amounts on a regular basis in an equity mutual fund scheme will provide and teach children two big advantages – the first being, “Rupee Cost Averaging” which is best explained with this example: Consider buying 50 units at Rs.20 per unit, or 100 units at Rs.10 per unit with Rs.1000 depending upon whether the schemes price, i.e. NAV is high or low. Thus, more units are purchased when the schemes’ NAV is low and fewer units when the NAV is high. Hence, with both cases are taken into account, the cost is averaged out. Moreover, the longer the investment horizon will be, the larger the benefits of averaging.

The second advantage is the benefit of compounding, which in simple term means that, each rupee invested earns some return, so each rupee plus returns end up as more rupees to earn returns on, allowing investment to grow at a faster pace. The table below illustrates the power of compounding.

Why start a Gulluck plan?

  • Teach kids a disciplined approach to savings and investments.
  • Reap the benefits of starting early
  • Develop a savings habit in children right from their childhood
  • Harness the power of two powerful investment strategies”
  • Rupee Cost Averaging – benefit from the ups and downs of the stock market
  • Power of Compounding – katra, katra bane Darya!