Work out what your child’s degree will cost by the time they start, and the monthly SIP that funds it. Handles multi-year fees and education inflation.
What education inflation rate should I use?
The CPI education sub-group that MoSPI publishes has run around 4% to 6% in recent years, but that average includes heavily subsidised government institutions. Private school and college fees in Indian cities have risen far faster, and 10% is the figure most planners use for private education. Use the published number if your child will study at a government institution, and 10% or more if they will not.
Why is the corpus less than the total course fees?
Because you do not need the final year’s fee on the first day. Money for years two, three, and four keeps earning while year one is being paid. On a four year degree at 7% that gap is over ₹24 lakh, and a calculator that ignores it tells you to save a fifth more than you need.
Where should the money sit?
Equity while the goal is more than seven years away, because nothing else beats education inflation over that horizon. Then move it out steadily. By three years before admission most of it should be in debt, and the first year’s fee should be somewhere you can withdraw it in a day. A fee deadline will not wait for a market to recover.
Should I use a child plan from an insurance company?
Look at the returns before you do. A traditional child plan typically delivers 4% to 6% a year after charges, which is below education inflation, so the corpus shrinks in real terms. A plain mutual fund SIP plus a separate term insurance policy on your own life usually costs less and delivers more. The insurance and the investment do not have to be the same product.
What if I cannot afford the instalment it shows?
Three levers, in order of how much they help. Start now, because the waiting figure on this page shows what three years of delay adds. Add a yearly step-up matching your increment, which cuts the starting instalment sharply. And be honest about the course: a private engineering degree and a government one differ by a factor of five, and planning for the expensive one when the cheap one is likely is its own kind of mistake.
Should I count the Sukanya Samriddhi account?
Yes, if it is earmarked for education. Enter its projected value in the existing savings field rather than its balance today, or run the Sukanya Samriddhi calculator first and bring that maturity figure here. Remember it only pays out at 18 and 21, so it can fund a degree but not school fees.