Nobody wants to compromise their children’s studies. Everyone wants to provide good education to their children. Nowadays competition is very high and there is no guarantee that your children will get admission in favorite course or college. For that your children will have to work hard.
You have to ensure that they do not have to compromise due to lack of money. You have to deposit enough money for their studies.
In this post, know how you can do this.
Note that school fees should come from your monthly income. This means send your child to a school whose fees you can bear. I XII’m talking about the cost of the studies which (L2 Th come after will come after class) or complete graduation | The cost of studying graduation or post-graduation (undergraduate or postgraduate).
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How much money will you need to study for children?
This is the first question. How much money to deposit?
This is difficult to answer.
Why?
First of all, you don’t already know what your child will read. It is also stupid to expect this from a 6-year-old boy. Each type of study has a different cost. Medical, Engineering, Management, Teaching etc.: Each type of study has different expenses.
Also, the cost of studies keeps increasing with time. Right now, the cost of studying engineering may be Rs 4 lakh, but after 10 years it can be 8 to 10 lakh. The fees of each engineering college may also be different.
When there are so many complications, how to plan?
Also, you know when you want money. If daughter 6 is 6 years old, then you know that you will need money to study for graduation after 12 years. You will not spend money in a year, during 3-4 years you will have to spend money.
What should be the target amount?
Start with an estimate.
If you think or you want the child to do some kind of study, then estimate the cost of that study.
Assuming the cost of medical studies is Rs 8 lakh. In today’s date, if you want to teach your child medical, then it will cost 8 lakh rupees. But after 15 years teaching you.
Apply inflation. For example, inflation will be from 6% to 8%.
After 15 years: 8 lakhs X (1.08) ^ 15 = 25.37 lakhs is required.
See, to make this amount, guess it. This estimate may be incorrect. But planning will have to be done.
How much do you have to invest?
You know the goal, you also know when you need money. But where and how much to invest for this.
First let’s see how much investment will have to be made?
Because salary is available every month, you will also want to make an investment every month.
Suppose you want 12 lakh rupees to study your daughter after 15 years.
Now you have to estimate the returns. This is also not an easy task.
Suppose you get a return of 10% per annum on your investment, then you will have to invest Rs 3,011 every month.
Where can I invest for children’s education?
You have many options to invest. Let us discuss some options.
# 1 Fixed Deposit or Recurring Deposit:
You can deposit some money every month. You will continue to get interest and your money will gradually increase. Keep in mind that invest only in cumulative fixed deposits. Interest in such FD does not come in your savings account and keeps adding to the FD itself.
Advantage : This is easy to understand. There is no risk or even risk.
Disadvantages : Returns will not get very good. Tax will also have to be paid on interest.
# 2 Public Provident Fund
You can also open a PPF account for your children. The account will be matured after 15 years.
Advantage : Interest rate is good. Returns are guaranteed. There is no risk. There is no tax on interest.
Disadvantages : The account will be matured after 15 years. Suppose you opened an account for a 10-year-old daughter, now this account will be matured after she is 25 years old. But you needed money at the age of 18 years. There may be a problem here. In such a situation, you can invest in your PPF account.
Read this post for more information on opening PPF accounts in the name of children.
# 3 Sukanya Samriddhi Yojana (Sukanya Samriddhi Yojana)
You can invest only in Sukanya Yojana for your daughters. Sukanya account cannot be opened for sons.
Advantage : Interest rate is good. PPF also fetches higher interest rate. Returns are guaranteed. There is no risk. There is no tax on interest.
Disadvantages : will be mature after 21 years of opening the account. If the daughter’s age is 5 years while opening the account, then the account will be matured at the age of 26 years. You may need the amount for studies earlier.
One option in Sukanya scheme is that you can withdraw up to 50% of the money after the daughter’s age of 18 years. You can invest keeping this option in mind.
Read this post for more information about Sukanya Samriddhi Yojana.
# 4 Equity Mutual Fund
This is also a good option but there is a risk.
Advantage : There is a possibility of getting very good returns. But invest only for a long period. You can invest a little bit every month through SIP.
Disadvantages : Risk remains. You may also suffer loss. If you cannot withstand the ups and downs of the stock market, then do not invest in it. You can also consult an expert.
If you are investing in equity mutual funds for the education of children, do not keep money in it till the end. As the time of study approaches, you can withdraw some money and deposit it in fixed deposit or debt mutual fund.
Read this post for more information about Mutual Funds.
# 5 ULIP (ULIP)
You can also buy ULIP plans from an insurance company. The only problem is that ULIPs come in many types. Do not invest in any wrong ULIP due to lack of your knowledge. Be sure to consult a good financial advisor before investing. In this post I have been informed about the ULIP |
# 6 other life insurance plan
Apart from ULIPs, life insurance companies also offer plans. The returns of such plans do not depend on the stock market. I do not like such plans because the returns are quite low. Such plans are an example of the LIC life Tarun | I would not suggest you to invest in such a plan. Rest as you wish.
Note : While filling the calculator, keep in mind one thing. The number of returns depends on your investment. For example, if you invest in PPF and return returns will be 12%, then it is not correct.
One more thing, you can invest for the education of children as long as you are alive. Therefore, you have to make sure that even after you continue to invest for the education of your children. The best way to do this is to get a life insurance plan . According to me term insurance plan is the best way to buy life insurance.
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