Last Updated : Mar 27, 2018 05:22 PM IST | Source:

Managing Money with Moneycontrol: The right investment plan for your child's future

Managing Money with Moneycontrol today brings to you on how you should plan for your child’s financial goals.

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Moneycontrol PF Team

Managing Money with Moneycontrol today brings to you on how you should plan for your child’s financial goals. In the accompanying video, Amol Joshi Founder, PlanRupee Investment Services shares actionable insights for you to achieve and secure your child’s future. If you want your queries to be answered, you can also write to us at

Planning for your child’s higher education is not only a long-term goal but it also requires a lot of financial planning. While planning to build the corpus for higher education it is important to go for investments that carry minimal risks. A good way would be to sit with your financial planner and decide on the investments that help you create wealth beating inflation that would help meet the rising costs of education many year later.

Here is how to go about planning for your child higher education costs:

Have a right portfolio mix

It is important to assign 10-20% of your portfolio towards products which can offer you secure returns. Since you have a long-term horizon for your investments, having the combination of long-term growth schemes like equity and balanced mutual funds in your portfolio can help you beat inflation. However, investing in equity mutual fund includes volatility risk.

As and when you near your goal try and increase the debt exposure by shifting your wealth from equity mutual funds to debt instruments. By doing this, you will be able to secure your portfolio successfully towards the accomplishment of your financial goal.

On the other hand, these debt funds like short-term income plans will also provide you stable return throughout the remaining period.

How to invest

Starting early and staying invested are two important aspects of child’s education planning. Going through a systematic investment plan is always a preferred option which is not only a pocket-friendly strategy of investing money but also helps in rupee cost averaging. It also provides benefit of compounding through which you can create a huge corpus.

Let us take the example of a goal of creating a corpus of Rs 30 Lakh to meet your child’s higher education with a time horizon of 15 years. Assuming a 12 percent returns, you would be required to invest Rs 6,000 per month in a portfolio mix of equity and balanced fund. You should also try and back it up taking a child ULIP’s plan which can secure your investment throughout the goals target period.

However, not everyone can plan it on time so in such case, In case you are falling short of the required amount when your child’s course starts, one can take an education loan and avail tax saving benefit by declaring income under section 80EE of income tax act.

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First Published on Mar 27, 2018 03:45 pm
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