Are you saving for your retirement? Do you want to build a corpus for your child’s education or marriage? A Solution Oriented Fund could be the perfect choice for you. This blog explains what is a Solution Oriented Fund in very simple language. You will also learn how to invest easily using the Sanchaay Karo app.
What is a Solution Oriented Fund? (Very Simple Definition)
A Solution Oriented Fund is a special type of mutual fund designed to help you achieve a specific life goal. According to SEBI, Solution Oriented Schemes include two main types: Retirement Funds and Children’s Funds.
Think of it like this: A regular mutual fund helps you grow your money generally. A Solution Oriented Fund is like a dedicated savings box for one big dream. You put money in, and you do not touch it until your goal is reached.
Key Highlights:
- Goal-Based Investing: Designed specifically for retirement planning or a child’s future (education, wedding, etc.).
- Mandatory Lock-In Period: SEBI requires a lock-in of 5 years or till the goal is reached, whichever is earlier.
- Open-Ended: You can buy and sell units after the lock-in period.
Retirement Funds aim to build a secure corpus for your life after work. Children’s Funds help parents accumulate wealth for long-term needs like higher education abroad.
How Does a Solution Oriented Fund Work? (Step-by-Step)
Solution Oriented Funds follow a “Glide Path” strategy. The fund manager automatically adjusts your asset allocation as your goal gets closer.
Here is a simple step-by-step breakdown:
Step 1: Determine Your Goal and Time Horizon
The fund is created for a specific purpose (e.g., retirement at age 60) and invests for a long duration (20–30 years).
Step 2: Aggressive Phase (High Equity)
In the beginning, the fund manager invests a high percentage (70–80%) in equity to maximize growth.
Step 3: Transition Phase (Moving to Debt)
As your retirement or the child’s age of maturity approaches, the fund manager gradually shifts money from equity to debt.
Step 4: Conservative Phase (Capital Protection)
When the goal is near (5–10 years away), the fund moves most of the money into debt to protect the accumulated corpus.
Key Features of Solution Oriented Funds
| Feature | What It Means |
|---|---|
| Goal-Based Investing | Tailored for retirement or child’s education |
| Lock-in Period | Mandatory 5 years or till the goal is met (e.g., child turns 18) |
| Dynamic Asset Allocation | Shifts from equity (growth) to debt (safety) over time |
| Open-Ended | Can redeem after lock-in |
| Professional Management | Fund managers handle rebalancing based on your life stage |
| Multiple Plan Options | Offers Aggressive, Moderate, or Conservative plans |
| SIP Facility | Available to start a Systematic Investment Plan with small amounts |
Types of Solution Oriented Funds
1. Retirement Funds
These funds are aimed at building a retirement corpus. They often offer different plans:
- Equity Plan: For young investors with a high risk appetite.
- Hybrid Plan: Balanced mix of equity and debt for moderate risk.
- Debt Plan: Higher debt exposure for those nearing retirement.
2. Children’s Funds (Gift Funds)
These funds help parents save for a child’s education, marriage, or other expenses. They also have a lock-in of 5 years or until the child turns 18. Some AMCs allow grandparents to invest as a gift.
Benefits of Investing in Solution Oriented Funds
Here are the main benefits of adding a Solution Oriented Fund to your portfolio:
| Benefit | Why It Matters |
|---|---|
| Disciplined Goal-Based Saving | The lock-in prevents premature withdrawals, forcing you to stay committed to your goal |
| Professional Asset Allocation | Fund managers adjust the mix of equity and debt as you age, removing emotional bias |
| Convenience (Plug-and-Play) | No need to research multiple funds. One fund does everything for you |
| Power of Compounding | Long-term compounding helps build a large corpus over decades |
| Strong Return Potential | Equity-oriented Retirement Funds have delivered 15–30% returns in some periods |
| Tax Benefit (80C) | Investments in certain Retirement Funds qualify for deduction under Section 80C |
| Gift Option | Relatives can invest in a child’s name through Children’s Funds |
Top Solution Oriented Funds in India (2026)
Here are the best performing Retirement and Children’s Funds based on recent data:
Top Retirement Funds (Equity Oriented)
| Fund Name | AUM (₹ Cr) | 5-Year Return (%) |
|---|---|---|
| ICICI Pru Retirement Fund – Pure Equity Plan | ~1,609 | 30.32% |
| HDFC Retirement Savings Fund – Equity Plan | ~6,236 | 27.46% |
| Nippon India Retirement Fund – Wealth Creation | ~2,605 | 23.01% |
Top Children’s Funds (Equity Oriented)
| Fund Name | AUM (₹ Cr) | 5-Year Return (%) |
|---|---|---|
| SBI Children’s Fund – Investment Plan | ~5,158 | 26.39% |
| ICICI Pru Children’s Fund – Gift Plan | ~1,404 | 14.67% |
| UTI Children’s Equity Fund | — | 21.34% |
Disclaimer: Past performance does not guarantee future returns. Please consult your financial advisor before investing.
Important: SEBI Has Replaced Solution Oriented Funds (2026 Update)
On 26 February 2026, SEBI issued a major circular discontinuing the Solution Oriented Schemes category. This was done to ensure “true-to-label” positioning and curb exaggerated return claims.
Key Changes:
- No Fresh Subscriptions: Existing funds cannot accept new money.
- Mergers: These schemes will be merged with existing schemes having similar asset allocation.
- Introduction of Life Cycle Funds: SEBI replaced them with Life Cycle Funds which follow a mandatory glide path.
If you are already invested in an existing Solution Oriented Fund, your money is safe. It will be moved to a new fund without triggering tax immediately.
Risks of Solution Oriented Funds (Must Read)
Solution Oriented Funds are powerful, but they come with risks:
Taxation on Solution Oriented Funds (Simple Rules for FY 2026-27)
The taxation depends on the fund’s underlying asset allocation (equity vs. debt):
Equity-Oriented (65%+ in equity)
| Type | Holding Period | Tax Rate |
|---|---|---|
| STCG | Less than 12 months | 20% |
| LTCG | 12 months or more | 12.5% (gains above ₹1.25 lakh) |
Debt-Oriented (65%+ in debt)
| Purchase Date | Holding Period | Tax Treatment |
|---|---|---|
| On/After 1 April 2023 | Any | Gains added to income and taxed at slab rate |
| Before 1 April 2023 | 3 years or more | 20% after indexation |
Tax Benefit: Investment in Retirement Funds may qualify for deduction under Section 80C up to ₹1.5 lakh (only under old tax regime).
How to Invest in Solution Oriented Funds Using Sanchaay Karo App
Now that you understand what a Solution Oriented Fund is, the next step is investing. The easiest way is through the Sanchaay Karo app.
Sanchaay Karo is a simple, trusted, and SEBI-registered mutual fund investment platform. It helps you invest in top funds with just a few taps.
Why Choose Sanchaay Karo App for Goal-Based Investing?
- Smart Goal-Based Investing: Tell the app your goal (retirement, child’s education). It suggests the right plan based on your risk profile.
- Simple Dashboard: See all your investments in one place – no confusion or clutter. Track NAV, returns, and portfolio in real time.
- Quick KYC: Complete your KYC online using Aadhaar and PAN in just 5 minutes. Paperless KYC is fully supported.
- Start SIP from ₹500: You don’t need a lot of money. Start small with a Systematic Investment Plan (SIP) . You can do monthly SIP, weekly SIP, or daily SIP.
- Track Performance: Get regular updates on how your fund is performing against its benchmark.
- No Hidden Charges: Transparent and low-cost. You can choose between regular plan and direct plan options.
- Stay On Track: Get timely reminders so your SIPs never stop.
Steps to Invest (Very Easy)
- Download the Sanchaay Karo app from Google Play Store or Apple App Store.
- Sign up using your mobile number and email.
- Complete KYC – upload PAN card and Aadhaar (fully paperless).
- Search for “Retirement Fund” or “Children’s Fund” based on your goal.
- Compare different funds based on returns, expense ratio, and fund manager track record.
- Choose between lumpsum or monthly SIP investment.
- Pay using UPI, net banking, or debit card.
- Done! Your investment starts growing. You will receive regular statements.
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Important Tips Before Investing
Before you invest in a Solution Oriented Fund, keep these points in mind:
- Check Your Tax Regime: Section 80C deduction is only available under the old tax regime.
- Understand the Lock-in: You cannot touch this money for 5 years. Ensure you have other liquid funds for emergencies.
- Start Early: The earlier you start (e.g., in your 20s), the more you benefit from compounding.
- Don’t Just Rely on One Fund: Diversify with PPF, EPF, or NPS to add safety.
- Check Expense Ratios: Higher fees can eat into your returns over the long term.
- Stay Invested Beyond Lock-in: Even after the lock-in, stay invested if your goal is still far away.
Frequently Asked Questions (FAQs)
Q1: What is a Solution Oriented Fund?
A: It is a mutual fund designed to help you achieve specific life goals like retirement or funding a child’s education.
Q2: Are Solution Oriented Funds safe?
A: They carry market risk like all equity funds. However, the automatic shift to debt as you approach the goal helps protect your corpus.
Q3: What is the lock-in period?
A: The lock-in is mandatory for 5 years or until the specific goal is met (e.g., child turns 18).
Q4: What is the minimum SIP amount?
A: Most funds allow SIP starting from ₹500 per month. Through the Sanchaay Karo app, you can start with as little as ₹500.
Q5: How are Solution Oriented Funds taxed?
A: Taxation depends on the underlying asset allocation. Equity-oriented funds have LTCG tax of 12.5% above ₹1.25 lakh after 1 year.
Q6: Are they better than regular mutual funds?
A: They offer discipline and automatic rebalancing. However, some regular Flexi Cap Funds have historically outperformed them.
Q7: Can NRIs invest?
A: Yes, NRIs can invest through Sanchaay Karo app using their NRE/NRO account.
Q8: What happened to these funds in 2026?
A: SEBI discontinued the category on 26 February 2026 and replaced it with Life Cycle Funds. Existing investments are being merged into other schemes.
Final Words – Should You Invest?
Yes, if you:
- Want a hassle-free, goal-based investment plan.
- Lack the time to manage asset allocation yourself.
- Are a beginner looking for a disciplined way to save for retirement or your child.
- Are investing for the long term (10+ years).
No, if you:
- Need flexibility to access your money before 5 years.
- Have a low risk tolerance.
- Prefer to build a custom portfolio using Index Funds or Flexi Cap Funds.
Solution Oriented Funds offer a simple, hands-off way to secure your biggest life goals. Start your investment journey today with the Sanchaay Karo app.
👉 [Click Here to Download Sanchaay Karo App Now] (https://apirrabbit.com/api/v1/master/LandingPage?arn=ARN-301757)
Disclaimer: This blog is for educational purposes only. Mutual fund investments are subject to market risks. Please read all scheme related documents carefully, including the Scheme Information Document (SID) and Statement of Additional Information (SAI) , and consult your financial advisor before investing. Past performance does not guarantee future returns. Tax benefits are available only under the old tax regime as per current laws. Tax laws are subject to change. The Sanchaay Karo app is a platform for mutual fund investments; all investments are subject to market risk.
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