Rising Education Costs? Build a Big Fund with PPF, SIP, or Sukanya—Know Which Is Best

Fees for streams like medicine, engineering, management, or studying abroad are rising so rapidly that mere savings are no longer sufficient. Proper investments make a real difference. If your child is young, you can start with a small amount and build a substantial corpus over time. The only thing you need to do is decide which option you want to invest your money in: safe returns or significant growth. Let’s find out which option best suits your needs.

PPF

The Public Provident Fund (PPF) has long been considered a reliable investment because your hard-earned money is safe and the interest rate is determined by the government. It is ideal for parents who prefer a risk-free approach. Its lock-in period is 15 years, making it an excellent option for long-term goals like your children’s education.

Consistent investments can build a substantial corpus by maturity. It currently offers an interest rate of 7.1 percent. Investments can start with a minimum of ₹500 per year, with a maximum limit of ₹1.5 lakh. Even after maturity, the account can be extended in 5-year blocks, and tax benefits are also available.

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Mutual Fund SIP

If you want to build a substantial corpus for your children’s education, a mutual fund SIP (Systematic Investment Plan) is a wise choice. Returns depend on the market, so there is risk involved. However, compounding significantly reduces this risk. Over a period of 10 to 15 years, a SIP can grow rapidly and make it easier to meet major expenses.

The ability to start with a small investment and increase the amount each year makes it even more beneficial. This is an excellent option for parents who can tolerate some market fluctuations and have a long-term perspective. The market will fluctuate, but there are equally growth opportunities.

Sukanya Samriddhi Yojana

If you have a daughter, the Sukanya Samriddhi Yojana (SSY) is one of the most profitable schemes. It is completely safe and currently offers a high interest rate of 8.2 percent. This account is opened in the name of a daughter under the age of 10. The investment period is 15 years, and the account matures at 21.

A minimum of ₹250 and a maximum of ₹1.5 lakh can be deposited per year. The returns can cover a significant portion of the daughter’s higher education. It also offers tax benefits, and there is no risk involved. Therefore, this plan is considered excellent for parents looking to build a future fund for their daughters.

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