Planning for a child's education? Check out THESE options

New Delhi: It's just as vital to plan for your child's future as it is to plan for your own. Because the cost of school is rapidly rising, you must prepare ahead for your child's education. You must begin planning for your child's education soon after the birth of your child, as higher education costs in India have increased by at least 6% every year.

Cost first

If inflation is anticipated to be around 6%, an MBA programme currently costing Rs 10 lakh in India will cost around Rs 35 lakh in 20-22 years. After 17-18 years, an engineering course that costs Rs 6 lakh today could cost Rs 14-15 lakh.

It will cost more if you plan for your child's education abroad. You must plan ahead of time.

You have a number of choices in front of you.

Mutual fund

The best option is probably mutual funds. After 20 years of investing, a monthly investment of Rs 3,000 in an equity-based or balanced fund would yield not less than Rs 25 lakh.

A 10% return would provide you Rs 23 lakh, whereas a 14% return from an equity-based fund would give you Rs 40 lakh for your child's education.

PPF

PPF is not only for your child's education, but also for your retirement. At a rate of 7.1 percent, investing Rs 1.5 lakh each year for 22 years would yield nearly Rs 80 lakh.

Because it is controlled by the government and has a 15-year initial lock-in period, it is one of the safest investment options. You can utilise a portion of this fund to pay for your child's education.

Sukanya Samiriddhi Yojana

The government introduced this scheme in 2014 for girl children under the age of ten years. This scheme requires a minimum investment of Rs 1,000 and a maximum investment of Rs 1.5 lakh per year. The current yearly interest rate is 7.6% compounded annually.

The account has a payment period of 15 years and a maturity duration of 21 years. If you invest Rs 1 lakh per year for 15 years, you will have a huge Rs 42.5 lakh at maturity, which you can spend for your girl's education and marriage.

RD and FD

Recurring and fixed deposits are two simple yet reliable investing alternatives. If you put Rs 5,000 in RD or FD on a daily basis for 17-18 years, you will have a least of Rs 25 lakh and maybe more.