How To Save Rs 1 Crore For Your Child's Education: Investment Strategy Explained

Parenthood comes with many responsibilities, including ensuring the child's financial security. From insurance to investments, preparing in advance is key to getting timely yields. As the child grows, expenses often rise sharply, with higher education and extra-curricular activities adding new financial demands. However, you can make this journey less stressful through long-term planning.

Building a corpus of Rs 1 crore can provide a strong financial foundation and protect parents from unnecessary stress. An investment plan over a horizon of at least 15 years can help you easily accumulate Rs 1 crore even with small contributions. 

By harnessing the power of compounding and spreading investments across assets, parents can support their child’s needs with confidence.

Historically, trends reveal that investing in mutual funds helps generate higher returns. With modest contributions too, parents can let the power of compounding work for them.

Monthly investment needed: Rs 6,000

Annual step up: 10%

Time period: 15 years

Expected returns: 12%

Invested amount: Rs 22,87,618

Estimated returns: Rs 29,22,690

Total value: Rs 52,10,309

Monthly investment: Rs 5,500

Expected return: 10%

Time: 15 years

Invested amount: Rs 9,90,000

Estimated returns: Rs 13,08,583

Total value: Rs 22,98,583

Monthly investment: Rs 7,500

Time: 15 years

Return: 7.1%

Invested Amount: Rs 13,50,000

Interest Earned: Rs 10,90,926

Maturity Value: Rs 24,40,926

Parents should note that these are estimated returns. A mix of high-return investment instruments along with secure schemes could be suitable for reaching the Rs 1 crore target. Schemes like PPF can also be explored for long-term wealth accumulation with tax benefits.

However, parents may decide to switch the allocation amount between various assets based on their risk appetite and financial position. It is also advisable to seek the guidance of a financial expert to avoid any uncertainties in future.