Folic acid has the following effects:

Helps prevent neural tube defects (also called "neural tube defects"), including very serious birth defects such as spina bifida and anencephaly. Neural tube defects are common birth defects in newborns.
May also help reduce your baby's risk of other types of birth defects, such as cleft lip and palate and certain types of heart defects.
To prevent anemia in pregnant women, the body of pregnant women needs folic acid to make normal red blood cells.
It is very important for the basic structure of DNA and cells. Therefore, getting enough folic acid is especially important for the rapidly growing placenta and baby.
Taking a multivitamin with folic acid may reduce the risk of preeclampsia in pregnant women.