Child Education Goal Calculator
Plan your child's education corpus accounting for education inflation (~10%). Free, privacy-first — inputs never leave your browser.
Details
Result
Required Monthly SIP
₹12,418
Future Cost
₹62,65,872
For estimation only. Not professional financial, tax, or legal advice. Consult a qualified advisor before making decisions. Full disclaimer.
Why education planning matters
Education inflation in India has averaged ~10% p.a. over the last decade — close to double the general CPI inflation tracked by the RBI. A four-year engineering programme that costs ₹8 lakh today will cost roughly ₹21 lakh in 10 years; a US Master's programme that is ₹60 lakh today will cross ₹1.5 crore by 2036. Because education costs are largely non-negotiable and time-bound, a goal-based SIP started at your child's birth is the single most important long-horizon financial plan most parents make.
How the corpus is calculated
Two calculations stacked back-to-back:
Future Cost = Current Cost × (1 + inflation)^years
Monthly SIP = FV × i / [((1 + i)^n − 1) × (1 + i)]
Where i is the monthly expected return of the investment mix (typically 10-12% for equity-heavy portfolios), and n is the number of months to the goal.
Worked example — engineering fund for a newborn
Current cost ₹10,00,000; education inflation 10%; horizon 18 years → future cost ₹55,59,917 (~₹55.6 lakh). To reach this at an expected 12% p.a. return, a flat SIP of ₹7,150/month for 18 years is enough. With a 10% annual step-up you can start at just ₹4,400/month and still comfortably reach the target. Parking the SIP in a diversified equity index fund in the early years and shifting to hybrid/debt funds in the last 3 years (glide-path) reduces sequence-of-returns risk.
Tax and regulatory context
- Sukanya Samriddhi Yojana (for girl child under 10): 8.2% tax-free, matures at 21 years, 80C eligible.
- Section 80C: tuition fees paid to any Indian school/college qualify up to ₹1.5 lakh (max 2 children).
- Section 80E: interest on education loan fully deductible for 8 years — no cap.
- LTCG on equity MF: 12.5% above ₹1.25L/year post Budget 2024 — matters when redeeming for fees.
- LRS limit: US$ 2,50,000 per year per person for foreign tuition remittance.
Common mistakes
- Using an insurance-cum-investment "child plan". ULIPs and endowment plans typically return 4-6% net — term insurance + index SIP beats them by 2-3× over 18 years.
- Under-estimating foreign inflation. US tuition + rupee depreciation has compounded at ~9% USD terms — build 11-12% into the forecast.
- No glide-path. A 100% equity portfolio 6 months before fees are due can lose 30% in a drawdown.
- Ignoring term insurance on the parent. A ₹1 crore term cover is the cheapest way to guarantee the goal if the earner is not around.
- Dipping into the corpus. Tag the folio "education" and avoid using it for unrelated goals.
Related calculators and reading
See also: SIP Calculator, Sukanya Samriddhi Calculator, Step-up SIP Calculator, Education Loan Calculator, glossary: Compound Interest.
Common questions about Child Education
How much do I need for my child's higher education?+
Today's cost: IIT/top engineering ₹10-12 lakh, IIM MBA ₹25-30 lakh, US undergrad ₹1-1.5 crore, UK/Singapore ₹50-80 lakh. Applying 10% education inflation over 18 years (typical newborn-to-college horizon), future cost: ₹50-60 lakh for Indian engineering, ₹4-6 crore for US undergrad. Start a ₹15,000-25,000/month SIP from birth to target a ₹50 lakh domestic corpus at 12% CAGR.
What is education inflation and why is it so high?+
Education inflation in India runs at 8%-12% — significantly higher than general CPI (5%-6%). Drivers: rising faculty costs, better facilities, ballooning demand for quality seats, and foreign exchange depreciation for overseas education. Professional courses (MBA, medicine) inflate fastest (10%-12%). Plan with 10% as base assumption; use 8% only for domestic public institutions with price controls.
Where should I invest for a child's education goal?+
Age-based allocation: 0-10 years to goal — 80% diversified equity mutual funds (flexi-cap, large-cap index) + 20% debt/PPF. 5-10 years — shift to 60-40. 3-5 years — 40% equity, 60% debt. Under 3 years — all debt/FD to avoid market timing risk at withdrawal. Sukanya Samriddhi for a girl child (8.2% tax-free) is an excellent debt anchor. Avoid child-specific ULIPs — high costs, poor flexibility.
Should I take an education loan for my child?+
A smart strategy even if you have savings: (1) Section 80E provides unlimited interest deduction for 8 years — effective rate drops to ~7% for 30% bracket taxpayer. (2) Child takes ownership of loan repayment, learning financial responsibility. (3) Your savings continue to compound in equity (12%+) while loan costs effective 7%. Keep saved corpus as backup if child can't find job; use for major milestones instead.
Are scholarships and fellowships realistic to count on?+
For planning, assume zero scholarships. Merit scholarships at top Indian institutes (IITs, IIMs) are modest (₹5-50k/year). US undergraduate scholarships are real but highly competitive (~5%-10% of applicants get substantial aid). Need-based aid at top US schools can be significant but requires uncommonly strong academic profiles. Don't shortfall your corpus assuming scholarships; treat any received as windfall.
How do I balance child education savings with my retirement?+
Prioritise retirement. Rationale: your child can take an education loan; you cannot take a "retirement loan". If resource-constrained, allocate 60%-70% of long-term savings to retirement (PPF, EPF, NPS, equity SIPs) and 30%-40% to child goals. Many NRIs and high earners afford both without trade-off, but middle-income families must explicitly protect retirement to avoid being dependent on children later.