If you have a 5-year-old child, you have around 13 years to prepare for higher education.
The key is to start early and follow a structured process.
a) Start Early Build a dedicated education corpus instead of depending only on traditional savings products.
b) Step Up Your SIP As your income grows, increase the investment every year. This can significantly improve the long-term corpus.
c) Review & Rebalance Don’t invest and forget. Review the portfolio periodically and adjust the asset allocation as the education goal gets closer.
d) Plan for Inflation Education costs can rise substantially over 8–10 years, so your target should be reviewed regularly.
e) Plan Tax & Ownership Carefully Investments in a minor’s name are subject to clubbing provisions.
f) Once the child becomes a major, taxation is generally assessed in the child’s hands, subject to prevailing tax and capital-gains rules.
Key Points to be noted:
A Rs 2 crore education goal needs more than just a SIP.
_ Start Early
_ Step Up
_ Review
_ Rebalance
_ Protect the Goal.
Please consult your financial advisor and Consultant before making any decision