For parents one of the biggest goals in life is to build sufficient corpus for education for their children. But the higher education costs have the highest inflation rates in the country and that makes very challenging for the parents to meet the child’s education goals.

We write this article to help parents who are saving for their children's education by explaining how mutual funds, can be effectively used to achieve one of their long term goals i.e. children’s education.

An Engineer, a teacher, a scientist, a doctor... Children dream of what they would like to become when they've grown up. Help them by providing the best opportunities to achieve their dreams.

The rising cost of education has become one of the biggest nightmares for parents. Today, the cost of nursery education for a toddler can be in the range of INR 60,000 to INR 3 Lakh annually. In such a scenario, the parents are looking at a college spend that is beyond their imagination. Considering that education costs are increasing at more than 20% per annum, parents need to invest into instruments which will yield the expected returns.

The tuition fee, add to that the cost of uniforms, books, sports gear, music, tuitions and lessons for math and science and you have alarming sum of money as education expense.

Expected cost of one year of Education 2017 2021 2030
High School Rs. 30,000 Rs. 45,000 Rs. 90,000
University Rs. 50,000 Rs. 77,000 Rs. 154,000

The idea is to start investing early is certainly very important. However, it's the 'how' and more importantly the 'how much' that need a bit more explanation, coupled with how long you have to save (estimated time horizon of investment).

Use either Child Education Calculator at www.fundsinvest.in or get in touch with our expert team members to establish the amount. It may be equal to or more than what you have available to invest.

Equities are the best option available as they are known to create wealth in the long term. However, given the volatile nature of this asset class, investors would be better off participating in the markets via the mutual funds route. The biggest advantages of investing into mutual funds are that they are managed by professionals who have the expertise in cherry picking stocks and they are also highly diversified across stocks and sectors.

If you have 10 or more years you can invest in Equity Mutual Funds and if the time horizon is less you can invest in Debt Funds and Balanced Funds with the below Mutual Fund product baskets to choose from, there's bound to be one that's an ideal fit for your current requirements.

Find the Best Children’s Education Plans to get started for a bright future for your child.

List of funds

- Children’s Investment Plans (Equity oriented and Debt oriented)
- Open Ended Equity Fund—Largecap,Multicap, & Midcap Funds
- Open Ended Balanced Funds—Balanced Funds and Dynamic Equity Funds
- Open Ended Debt Funds—Liquid, Short Term and Medium Term Funds

These advantages should be viewed along with the caveat that mutual funds are also subject to volatility.

In the mutual funds space, parents can either create a portfolio exclusively for the purpose of funding their children’s education or specifically invest into children’s plans offered by fund houses.

Parents should follow the below guidelines, while creating a portfolio for their children.

• Open a minor account
• Make use of the Lump Sum and SIP route for all investments
• If the higher education (college enrollment) of the child is less than 5 years away, the portfolio should consist of debt and balanced funds
• If the college education is more than 5 years away, an aggressive portfolio consisting of equity funds and one balanced fund will be ideal. A balanced fund is suggested in this portfolio so as to get a flavor of fixed income
• The portfolio should be reviewed every year. If any of the funds have been underperforming continuously for 3 years, then the SIP in the fund can be stopped and you can switch to another better performing fund.
• Two years before the college education/ when you need the funds, the entire surplus accumulated in the equity and balanced funds should be moved into debt funds
• Finally, every year you should increase the amount invested in the SIP. If the portfolio has 4 to 6 good funds, the increased amount can be allocated among the existing funds.

So Dear Parents, Your Child’s Education is a non-negotiable goal to be fulfilled after a predictable time. To accumulate wealth to secure children’s future and also protect them against uncertainties, parents should not only save regularly but also start investing early.

It is better to look beyond traditional financial instruments - to avenues such as mutual funds and the systematic features offered by them - to generate the best from the underlying investment class, taking into consideration their own risk appetite, returns expectation, and investment horizon before investing.

A little bit of careful planning, regular saving and consistent investing today is what is required so that you can take care of these future needs without worrying too much.

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Find out more about the company at http://www.fundsinvest.in/

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