What is a child education plan?
A child education plan is the process of calculating the future cost of your child’s higher education and systematically investing to reach that goal. Because education costs rise at 10-12% per year in India, the same course that costs ₹5.00 L today could cost ₹17.26 L by the time your child is ready for college.
This calculator shows both the target corpus needed and whether your current monthly SIP of ₹5,000 is enough to reach it. If there is a shortfall, it tells you exactly how much additional you need to invest each month to bridge the gap.
How to plan for education costs
Planning for your child’s education involves three steps:
•Estimate the future cost: Take the current cost of the course your child is likely to pursue and apply the expected education inflation rate over the number of years until they start. This calculator does this automatically using the formula Future Cost = Current Cost × (1 + Inflation)^Years.
•Calculate the required monthly investment: Based on the target corpus, your existing savings, the number of years available, and your expected investment return, determine the monthly SIP needed to reach your goal. Adjust the monthly SIP slider until the projected corpus matches or exceeds the future education cost.
•Choose appropriate investment vehicles: For horizons of 10+ years, invest in equity-oriented mutual funds via SIP for the best growth potential. As the goal approaches (within 3-5 years), gradually shift to debt funds or fixed deposits to protect the corpus from market volatility.