New Delhi: In today’s times, the cost of children’s education is rising rapidly. For everyone, bearing the expense of a child’s education now seems like a monumental task. If you wish to educate your child abroad, it requires a substantial financial outlay. For low-income earners, funding a child’s education overseas can be extremely challenging. However, there is no need to worry anymore. With the right planning, you can fulfil your dream of sending your children abroad for their studies. To achieve this, parents should aim to build a dedicated fund of approximately ₹1 crore for their children’s education.
📈Strategy 1: Term Plan + SIP
- Most flexible & effective approach
- Strong Term Insurance — protects the child’s future
- SIP in mutual funds @ 12% avg return
- ₹20,000/month → ₹90L–₹1 cr in 12–15 yrs
- Compounding is the key advantage
🏦Strategy 2: PPF + SIP combo
- PPF: ₹12,500/month → ~₹40L in 15 years
- SIP: ₹10,000/month → ~₹60L in parallel
- Combined total: ₹1 crore corpus
- PPF offers tax-free, government-backed returns
- Dual-investment = dual safety
Starting Early is Crucial
If your child is currently very young—specifically between 2 and 5 years old—you have a time horizon of 12 to 15 years ahead of you. This time is your greatest asset. The sooner you begin investing—even if it is done gradually—the greater the benefits you will reap through the power of compounding (earning interest on interest).
Specialised Child Insurance Plans
Among the various options, the first method—a combination of a Term Plan and an SIP (Systematic Investment Plan)—is considered to be the most flexible and effective.
A critical component of this strategy is securing a robust Term Insurance policy. This ensures that, in the unfortunate event of an unforeseen tragedy in the future, your child’s education remains uninterrupted. Simultaneously, you should initiate an SIP in mutual funds. For instance, if you invest ₹20,000 per month and achieve an average annual return of 12% (which is easily attainable), you could build a corpus of approximately ₹90 lakhs to ₹1 crore over a period of 12 to 15 years.
The Advantages of PPF
Under this scheme, you can invest up to ₹1.5 lakhs annually (equivalent to ₹12,500 per month). Over a period of 15 years, this investment could grow to approximately ₹40 lakhs. Additionally, if you simultaneously run a monthly SIP of ₹10,000, you could accumulate a separate fund of around ₹60 lakhs. By combining these two strategies, you can successfully achieve your target of building a ₹1 crore corpus.
A Special Option for Daughters
If you have a daughter, the *Sukanya Samriddhi Yojana* serves as an excellent investment option. It offers fixed and attractive returns. Under the Sukanya Samriddhi Yojana, it is possible to build a corpus of approximately ₹70 lakh. If you contribute ₹3,000 per month through a small SIP, the remaining amount can also be easily accumulated.
