How to invest for your child's education: the cost, the monthly amount and the glide path

Step 1: put a number on the goal

"Saving for education" is not a plan until it has a rupee figure and a date. Pick the kind of course you are planning for, find what it costs today in fees, hostel and living, and note the year the first fee is due. If you are unsure, plan for a range: a lower and a higher figure.

Then grow it. Education costs in India have risen faster than general inflation for years, but no official index tracks the fees of the course your child will choose. So treat the rate as an assumption and test more than one. The inflation calculator and the module on inflation show how quickly a rupee shrinks at different rates.

The spread is large. Between 6% and 10% a year, the 15 year figure moves from ₹48 lakh to ₹84 lakh. That is why the rate is worth a conversation before the fund is.

Step 2: the monthly amount

Once the target is fixed, the monthly SIP that reaches it depends on the years and the return you assume. Here is the 8% case, ₹63.4 lakh in 15 years and ₹43.2 lakh in 10, at three returns:

With only 10 years left, the same ₹20 lakh course at 8% inflation needs ₹23,445 a month at 8%, ₹20,904 at 10% or ₹18,584 at 12%. Starting five years earlier cuts the monthly amount by about a quarter, even though the target is higher.

Two levers help more than chasing a higher return:

• Start earlier. Every year of delay raises the monthly amount.
• Raise the SIP with your income. A SIP that rises 10% a year can start at a much lower amount for the same target. The goal planner and the step up SIP calculator work it out.

Step 3: what to hold, and the glide path

A goal fifteen years away can carry mostly equity, because there is time to recover from falls. On the Nifty 50 price index since 2012, no seven or ten year holding lost money, while one year holdings lost in about one start date in six. The guide on how long to stay invested has the full table.

The danger is the end. A three year holding of the Nifty 50 could still be 5.86% a year down in this record, about 16.6% in total, if it ended in a crash. A family that needs the first fee in March 2020 and holds all equity in February 2020 has a problem no long run average can fix.

So the usual plan moves the money out of equity gradually as the date approaches. One illustration:

1. 15 to 6 years beforeMostly equity

   For example 80 to 100% in diversified equity, with the SIP running and a yearly rebalance.

2. 5 years beforeStart the glide

   Move about a fifth of the equity to debt each year, or send new SIPs to debt.

3. 2 years beforeMostly debt

   The first year's fees sit in deposits or short duration debt.

4. Fee yearThe money is there

   A crash that year changes little, because little is still in equity.

Moving in steps over several years, not on one day, avoids betting the whole switch on one date. Sales along the way are taxed: equity gains after 12 months at 12.5% above ₹1.25 lakh a year, which spreads well over several years. The equity allocation guide shows what different equity and debt mixes did in falls since 2015.

If you are starting late

With five years or less to go, the arithmetic changes. There is no longer time for equity to recover from a bad fall, so most of the money belongs in debt from the start, and the return you can plan on is lower. The ₹20 lakh course, at 8% cost inflation, is about ₹29.4 lakh in five years. At an assumed 7% a year from a debt heavy mix, that needs about ₹40,800 a month, roughly two and a half times the 15 year figure at 10%.

That gap is the real argument for starting early. Late starters usually close it with a mix of a higher monthly amount, an existing lump sum, a cheaper course or an education loan for part of the cost. A loan is not a failure of planning: interest on a loan for higher education is deductible under the old regime for up to eight years, and a smaller loan with savings behind it is a common, sensible combination. The lump sum or SIP guide covers how to put an existing sum to work.

Step 4: protect the plan

• Insure the earning parent. A term insurance cover large enough to fund the goal means the plan survives even if the income does not.
• Keep it separate. A goal with its own SIP and its own folio or account is less likely to be raided for something else. The note one profile, many goals shows how one household can run several goals with different mixes.
• Mind whose name it is in. Income from investments made in a minor child's name, such as interest and capital gains, is generally added to the income of the parent with the higher income, apart from a small yearly exemption per child. Holding the goal in the parent's own name, earmarked for the child, is simpler for most families.
• Do not count on one product. Government schemes such as PPF and, for a daughter, Sukanya Samriddhi have set rates and long lock ins; they suit part of the debt side. Child plans sold as insurance often mix cover and investment at a high cost; compare them with term insurance plus a separate investment.

Planning for your child's education, step by step

1. Fix the goalthe course, today's cost and the year the first fee is due, as a range if unsure.
2. Inflate ittest two or three yearly rates for education costs and take the higher result seriously.
3. Work out the monthly amountat a modest return, and with a yearly step up you can sustain.
4. Choose the holdingsmostly diversified equity while the goal is far, debt for money needed within three years.
5. Write the glide paththe year you start moving to debt, and how much a year.
6. Protect itterm cover on the earning parent, a separate account, a yearly review of cost, SIP and mix.

How this shows up in RupeeCase

A RupeeCase strategy can hold the equity part of a long dated goal in your own demat, with a fee of 0.2% of the value traded at each rebalance and no expense ratio. The hybrid rules hold a debt and gold sleeve inside the strategy. Large Mid Hybrid runs a momentum rule on large and mid companies with that sleeve, 41 holdings rebalanced every 2 weeks: model CAGR 33.21%, deepest fall −18.27%, as of 27 Apr 2026. The glide path to debt in the last years before the fee is yours to run; a model CAGR is not a rate to plan a goal on.

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