How to Plan For Your Child's Education with SIP Investment

Are you planning for your child’s future? We know it can get really difficult at times. The cost of education in India, especially in private schools, is on the rise. And keeping the current inflation rate in mind, it is bound to increase in the near future. You might have a fair idea about how much corpus you mid need for your child’s education, but in order to reach that goal, it is essential to diversify your investment portfolio. In order to increase your chances of building a decent corpus for your child’s education, it is essential that you invest smartly now. 

Although there are traditional investment tools available as an investment option, these might not be able to live up to your expectations, especially keeping the current inflation rate in mind. If you have a moderately high risk appetite and seek long term capital appreciation, you can consider investing in a solution oriented mutual fund schemes.

If you wish to find more about mutual funds and how they can help you plan for your child’s education fees, read further:

What are mutual funds?

Fund houses and AMCs (Asset Management Companies) offering mutual funds generally collect money from investors who share a common investment objective and invest this pool of fund in equities, government bonds, debt securities, or other money market instruments. A mutual fund is this pool of money and is generally managed by a professional and experienced fund manager.

AMCs usually charge a small fee from investors for managing their money. Mutual funds may be one of the investment tools for investors who might be new to the world of investing and do not know much about the same. Investors may opt for a mutual fund scheme depending on their investment objective and commence investing with the hope of getting a step closer to their ultimate financial goal.

If you have a long term goal and wish to increase your chances of building a decent corpus for your child’s education, you can consider investing in Axis Children’s Fund. Axis Children’s Fund is a An open ended fund for investment for children, having a lock-in of 5 years or till the child attains age of majority (whichever is earlier).

What is the Axis Children’s Fund?

Axis Children’s Fund is a mutual fund scheme with the investment objective of generating income by investing in debt and money market instruments along with long-term capital appreciation through investments in equity and equity related instruments. But investors should keep in mind that mutual fund investments are subject to market risk and returns are never guaranteed. Axis Children’s Fund helps you invest in the name of a child for the future of the child, for example, marriage or in this case, for their education. Parents are usually worried that they might not be able to save enough corpus for their child’s future. But with an investment option like SIP, they can continue to invest in Axis Children’s Fund in an easy and hassle free manner.

What is SIP?

Systematic Investment Plan or SIP is a powerful investment tool which can give a systematic approach to any investment. Investments done through SIP have several advantages to them. With SIP, all an investor needs to do is instruct his/her bank, and a predetermined amount shall be deducted from his/her bank account on a predetermined date every month. This way, investors can continue investing in a hassle-free manner and do not need to visit the AMC to pay their SIP.

How investing in Axis Children’s Fund through SIP can be beneficial?

• Inculcates the discipline of investing regularly: As stated earlier, SIP investment are usually made every month on a predetermined day. The SIP amount is automatically debited from an individual’s account and credited to their investment scheme. This disciplinary approach of regular investments may prove beneficial for investors as they continue to invest without any hindrances.
• Rupee Cost Averaging: Investing in mutual funds through SIP may result in all your savings getting safeguarded by Rupee cost averaging. Rupee cost averaging helps an investor beat market fluctuations and makes his/her investment averse to market volatility. When the stock prices hit rock-bottom, SIP automatically allocates an investor more units and allots lesser units when the stock prices soar high thereby, averaging out his/her savings.
• Power of compounding: Power of compounding refers to earning profits by investing your profits. SIPs allow your investment to grow further by reinvesting your initial investment. In order to make most out of compounding in mutual funds, one must begin investing early. But even if you start late, you can still make the most out of the power of compounding by investing regularly for your child’s future.
•  The early you start, the better it is: The essential part of financial planning for your children’s education is to begin as early as possible. The current MBBS fees in India cost around Rs. 25-30 lakhs, whereas foreign education costs more than Rs. 30 lakhs. Due to inflation, these prices will double in the next 10-15 years. Hence, it is vital to realize the importance of investing as early as possible so that you can maximize from the power of compounding.

SIP is a great way to begin investing in Axis Children’s Fund. It gives the investor an option to invest regularly with small amounts. This not only inculcates a good habit of saving regularly but also increases your chances of building a decent corpus to secure your child’s future. Make sure that you include SIP payments while planning for your child’s future.

Axis Childrens Gift Fund

An open ended fund for investment for children, having a lock-in of 5 years or till the child attains age of majority (whichever is earlier)

Mutual Fund Investments are subject to market risks, read all scheme related documents carefully.