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Introduction
The cost of education is rising rapidly — whether it's engineering, medicine, or a foreign degree. A ₹10 lakh degree today could cost ₹30–40 lakh in 15 years. To beat inflation and build a solid corpus, mutual funds offer a structured, disciplined, and goal-linked solution.
In this blog, we explore how you can plan for your child’s future using mutual funds and how real-life parents like Ravi and Sneha did it smartly.
17/06/2025
Beats inflation: Education inflation is ~10–12%. Equity mutual funds can deliver 12–14% CAGR over 10–15 years.
Flexible and liquid: You can start with SIPs, top-up annually, and withdraw via SWP or lump sum when needed.
Customizable: You can select a mix of equity (for growth), hybrid (for balance), and debt funds (for safety closer to goal year).
Real-Life Example: Ravi & Sneha’s SIP Plan Ravi and Sneha started investing ₹5,000/month in an equity mutual fund when their daughter Nisha was 3 years old.
| Child's Age | Years Left | Suggested Fund Type |
|---|---|---|
| 0-5 yrs | 15-18 yrs | Equity Mutual Funds |
| 6-10 yrs | 8-12 yrs | Aggressive Hybrid Funds |
| 11-15 yrs | 3-7 yrs | Conservative Hybrid/Debt |
| 16+ yrs | <3 yrs | Short-Term/Debt Funds |
Conclusion
Child education planning is a long-term goal that requires early action, discipline, and fund selection that evolves with time. Mutual funds — especially via SIPs — offer the right mix of growth and flexibility to ensure your child’s dreams are never compromised.
Start a SIP today dedicated to your child’s education. Label it, track it, and review it yearly. Your child’s future deserves financial clarity and security.
| Stage | Time Horizon | Recommended Fund Type | Risk Level | Examples | Why Suitable |
|---|---|---|---|---|---|
| Early Stage (0-5 yrs) | > 10 years | Equity Mutual Funds / Index Funds | Moderate-High | Axis Bluechip Fund, Nifty 50 Index Fund | Long horizon allows growth via equity compounding |
| Middle Stage (6-10 yrs) | 5-10 years | Balanced / Hybrid Funds | Moderate | HDFC Hybrid Equity Fund, ICICI Prudential Balanced Adv. | Mix of equity & debt reduces volatility |
| Teenage Stage (11-15 yrs) | 3-5 years | Conservative Hybrid / Debt Funds | Low-Moderate | SBI Child Benefit Fund – Investment Plan | Gradual shift to safer instruments |
| Pre-Education Phase (16-18 yrs) | < 3 years | Short-Term Debt / Liquid Funds | Low | HDFC Short Term Debt Fund, ICICI Liquid Fund | Preserves capital and offers liquidity |
Dr. Satish Vadapalli
Research Analyst
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