Plan Your Child’s Education Fund

1. Can give 10%–14% CAGR returns 

1. Recommended: Equity mutual funds (via SIP) 

2. Sukanya Samriddhi Yojana (for girl child)

1. 7.6% interest rate (as of 2025) 

1. Tax benefits under 80C 

1. Locked till age 21 

3. Public Provident Fund (PPF)

1. Long-term, tax-free, safe 

1. Lock-in of 15 years 

1. Moderate returns (~7.1%) 

4. Child Education Plans (ULIPs)

1. Combine insurance + investment 

1. Useful if you want a life cover too 

5. Fixed Deposits for Minors 

1. Safe but not inflation-beating 

1. Good for short-term goals 

Step-by-Step to Plan Your Child's Education

Here are steps to plan your kids Education

Set a Clear Educational Goal

Begin by asking: 

1. What is the highest level of education you want to fund? (Graduation, MBA, foreign studies?) 

1. Is your preference for studying in India or abroad? 

1. Will you cover school + college, or just higher education? 

Example: Planning for a child who wants to pursue engineering in the US would require more funding than an MBBS in India. 

Calculate the Future Cost of Education

Education inflation in India is between 8%–12% annually. A course that costs ₹10 lakhs today may cost over ₹30 lakhs in 15 years. 

Use this formula:

Future Cost = Present Cost × (1 + Inflation Rate)^Years Left

Add a calculator widget here for engagement.

Identify Your Investment Time Horizon

The age of your child today will determine the length of your investment plan: 

1. Child is 1–5 years: Long-term plan (15–20 years) 

1. Child is 6–12 years: Mid-term plan (8–12 years) 

1. Teenager: Short-term plan (under 5 years – more conservative)

How Much Should You Save Monthly?

Let’s say:

1. Goal: ₹30 lakhs in 15 years 

1. Expected Return: 12% annually 

You’ll need to invest ₹6,200/month via SIP to achieve it.

Use an education planning calculator to adjust for different goals and returns. 

Tax Benefits You Can Avail

1. Section 80C: Up to ₹1.5 lakh/year for PPF, ULIPs, SSY

1. Section 80E: Deduction on interest paid for an education loan

Common Mistakes in Child Education Planning

• Starting too late – You lose out on compounding.
• Ignoring inflation – ₹10L today won’t be ₹10L in 15 years.
• Not having insurance – Ensure a backup if something happens to you.
• Over-relying on FD – Low returns may not meet future costs.