Hello Readers! 

After a couple becomes parents, all their priorities revolve around their child, be it his parenting in a good way, or be it giving him/her best education. Yes, the best education today is obviously best at its expenses also. With the continuous increase in inflation, The tuition fee is rising steeply. The rate of increase in the school/college fee is comprehensively beating the inflation rate by a considerable margin.

Basically, it is showing that to give the best education to your child, you cannot depend on regular income or regular savings. There is something better that you need to plan, and what best to save a big amount for your child's education is to invest it at a place or financial instrument that gives your money proper growth in the required time.

Let us see how we should plan for our child's higher educational expenses!

Regular Saving Account Is Not Enough…….

Saving Bank Account, where we keep our saved money or money that we don’t use in present but for future goals. Suppose you have Rs 10 lakh in hand which is of no use to you currently, so with the motive to get your child admitted to the best engineering college 15 years after, you put that money in your saving bank account.

The amount of Rs 10 lakh might now be enough to pursue an engineering degree from a reputed institution. Fifteen years down the line, Rs 10 lakh might not be enough to pursue even a higher secondary school education. Thus, keeping the rise of inflation in mind, it's not a good idea to depend on a saving bank account for your child's higher education expenses.

Consider The Cost Of Education In India…….

Before you plan to create a big corpus, it would be ideal to estimate how much would you require at the time your child will get admission to college. The professional courses, like engineering, MBA are expensive and thus require a big investment planning. Pursuing a full-time degree from the premier government institutes such as IITs, NITs, and IIMs would cost at least a lakh and a half per annum, currently, thus it is obvious that 15 years after the cost would be around 5-6 lakhs or more than that. In addition, would come the cost of accommodation that is hostel fees, then miscellaneous fees which swell up the annual fee to over two and a half lakh a year.  

If we do round off, it will be around 4-5 lacs currently, then it's obvious after 15 years you would require around 8-10 lacs. 

Cost Of Higher Education In Abroad……….

If you are planning to send your children abroad for their higher education, then you need to start planning for it at the earliest. A master’s degree in developed countries such as the USA, UK, Australia, and Canada would cost more than 40 lakh, and raising that amount in a year or two is extremely difficult. Hence, planning early is critical in this case.   

Best Place To Invest For Your Childs Education……..

Well, there are a various financial instrument where people invest for their child’s education, like Child insurance policies, money-back policies, fixed deposits, and so on, but if you ask an expert, he would genuinely ask you to go with Equity Mutual funds, as these are the only investment that offers inflation-beating returns.

You can easily plan to invest in an equity mutual funds for long term via SIP (Systematic Investment Plan). Suppose you calculated the amount required for educational expenses, and it came around 13-14 lacs that you would be requiring after a period of 15 years. In that scene, you can start investing in equity mutual funds via a monthly SIP of Rs 3000 for long 15 years with an expected return rate of 12%. This would help you build a good amount for your child’s education that is around Rs 15 lacs.

Basically, plan your investment for your child’s education at a place, that helps you build the amount that is expected and more than that because your child's higher education is something that you cannot compromise just because the expenses are high. After all, health is the greatest wealth that you give to your children.

Keep reading our articles for more updates on finance and investment!!

For any kind of query you can contact us at Shri Ashutosh Securities Pvt Ltd., we are here to help you in any way possible.

Happy Investing!

(Mutual Fund investments are subject to market risk Illustrations are for example only, there is no guarantee of returns. Past performance is not an indicator/guarantee to future returns).