Education Fund Planning

Start from the goal: target college/program costs today, add expected inflation, and compute the required corpus at the admission year.

Map instruments to horizon: equity MFs for 7y+, hybrid for 3–7y, short-term debt/FDs for ≤3y. Add a sovereign-backed bucket for safety.

Automate SIPs and add a step-up annually; rebalance to maintain asset mix and derisk 2–3 years before the fee due date.

Ensure adequate term/health insurance so the plan survives life’s surprises.

Goal firstGlide-pathRisk control

How to Build the Plan

  1. Estimate future fee: Current fee × (1 + inflation)^years. Add living costs and buffer.
  2. Choose asset mix: Early years: equity-heavy; mid-phase: add hybrid; last mile: shift to debt/SSY/PPF/FD.
  3. Execute: Set up SIPs/STPs; use direct plans; review yearly; step-up contributions.
  4. Derisk: Move to safer assets 24–36 months before the goal to avoid sequence risk.

Where to Invest

  • Equity MFs: Index, large & mid, multi-cap for growth (7y+).
  • Hybrid/Balanced Advantage: Smoothen volatility (3–7y).
  • Debt/Ultra Short/FD/PPF/SSY: Capital safety, liquidity (≤3y or last-mile).
  • International allocation (optional): 10–20% for diversification if access allows.

Education only; not investment advice. Please verify current rules, interest rates, and taxation before investing.