SIP Investment for Education Planning: Higher education makes your child able to compete with the rest of the world in their profession. It makes them realise their true potential and helps them become self-dependent. An educated environment at home is most likely to make daily discussions healthy and children responsible in their lives. But modern education is costly. A parent needs to start investing from today to build a corpus for their child’s higher education.
The mode of investment and the investment types can be according to an individual’s choice, but they need to give their investments a long time to generate a large corpus for education.
What if you are targeting an Rs 1 crore amount for your child’s education in 15 years and want to start investing for the same?
How much you may need to invest today. yearly, or in a month?
See our estimates to know-
Rising cost of education
Education inflation is one of the key inflations that impacts the finances of an individual.
As per the Consumer Price Index numbers for May 2025, the year-on-year education inflation rate for the month of May, 2025, was 4.12 per cent.
The corresponding inflation rate for the month of April, 2025, was 4.13 per cent.
The rate, however, may be much higher for specific courses.
However, going by a 4.12 per cent rate, here’s how the price of a course costing Rs 20 lakh today will increase in the next 15 years.
You can see that one needs at least Rs 35.20 lakh to meet education inflation in 15 years.
If you need Rs 1 cr in 15 years
If you need Rs 1 crore in 15 years and the education inflation rate is 4.12 per cent, let’s see how much you actually need in today’s cost.
In the table you can see that at a 4.12 per cent discount rate, the present value of Rs 1 crore is Rs 56.83 lakh.
It means an Rs 1 crore corpus target is justified if the present fee of the same course is Rs 56.83 lakh and education inflation rises at 4.12 per cent. If the inflation rate is higher, you may need to target a higher amount than Rs 1 crore.
But if the inflation rate or the education cost rises at 6 per cent or 8 per cent, let’s see the current fees of the courses that will be worth Rs 1 crore in 15 years.
At a 6 per cent inflation rate, the estimated present value of a Rs 1 crore course will be Rs 44.23 lakh.
While, at an 8 per cent inflation rate, the present value of a Rs 1 crore course will be Rs 34.04 lakh.
Calculations for story
For the story, we will calculate that if your annualised investment growth is 12 per cent, how much estimated investment you need today, yearly or monthly, to get Rs 1 crore in 15 years.
One-time investment required to achieve Rs 1 crore in 15 years
The estimated one-time investment required to achieve the target is Rs 18,26,963.
The estimated capital gains in 15 years will be Rs 8,173,037.
Yearly investment required to achieve Rs 1 crore in 15 years
The estimated one-time investment required to achieve the target is Rs 2,39,502.
The total investment in 15 years will be Rs 35,92,532 estimated capital gains in 15 years will be Rs 64,07,468.
Monthly investment required to achieve Rs 1 crore in 15 years
The estimated one-time investment required to achieve the target is Rs 21,011.
The total investment in 15 years will be Rs 37,82,058 estimated capital gains in 15 years will be Rs 62,17,942.
One-time, yearly, monthly investment tables
(Disclaimer: This is not investment advice. Do your own due diligence or consult an expert for financial planning.)
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