A degree that costs Rs.15 lakh today works out to roughly Rs.63 lakh in 15 years, because education costs in India have risen close to 10% a year — faster than general inflation. Plan with today''s fee and you will be short by half.
Here is how to size your child''s goal properly, and the monthly SIP behind it.
Not a guess — the actual number. A private engineering degree, a 2-year MBA, an overseas master''s, a medical seat. Include tuition, hostel and living, one year at a time, then add them up. Most parents land somewhere between Rs.10 lakh and Rs.40 lakh in today''s money.
Education inflation in India has run around 10% a year for a decade. Apply it to the number of years until the course starts:
| Years until the course | Multiply today''s cost by |
|---|---|
| 8 years | ~2.1x |
| 12 years | ~3.1x |
| 15 years | ~4.2x |
| 18 years | ~5.6x |
So a Rs.15 lakh course, 15 years away, is about Rs.63 lakh when your child actually gets there.
For a goal 15 years out, most of the money can sit in equity (it has time to ride out market falls), with some in debt and gold. At a blended ~11% assumed return, building Rs.63 lakh in 15 years needs roughly Rs.14,000 a month.
Start earlier and it drops sharply. The same Rs.63 lakh target with 18 years to go needs about Rs.9,500 a month; with only 10 years, closer to Rs.29,000.
Five years before the fees are due, you should not still be fully in equity — a bad market year right before admission would force you to sell low. A good plan moves the money down a glide-path: heavy equity early, mostly debt and liquid funds in the last few years, so the amount is protected when you need it.
The planner on this site does all four steps: you enter the course, the year, and it inflates the cost, works out the SIP, sets the right equity/debt/gold mix for the timeline, and shifts it to safety automatically as the date approaches. You can also link the SIP to a real NSE mandate once the plan is set.
Q. Is 10% too high an assumption for education inflation?
A. For private and professional courses in India it has been close to that over the last decade, and often higher for overseas study once you add currency movement. General CPI inflation (~6%) understates education costs badly, which is why planning at 6% leaves parents short.
Q. Should I use a child-specific mutual fund or plan?
A. You do not need a product with "child" in the name. What matters is the target amount, the timeline, and a sensible equity/debt mix that gets safer as the goal approaches — that can be done with ordinary diversified funds.
Q. What if I cannot afford the full SIP now?
A. Start with what you can and step it up ~10% a year as your income grows, or extend by funding part of the final cost through an education loan. The planner shows the shortfall clearly so you can decide.
Q. Sukanya Samriddhi or PPF for a daughter''s education?
A. Both are safe and tax-free but return around 7-8%, below education inflation — so they work as the stable part of the plan, not the whole plan. The equity portion is what closes the gap over 12-15 years.
Plan Our Future · AMFI-registered Mutual Fund Distributor (ARN-360754). Mutual Fund investments are subject to market risks, read all scheme related documents carefully.