Mutual Funds: Can small SIPs help you save enough for children's education?
Also Read: Building wealth together: A guide to joint investment accounts for kids When saving for your child’s education, the impact of compound interest is significant. Initiating early and utilizing the benefits of compound interest can help you to grow your money. Compound interest enables your money to multiply exponentially over time.
Each year, the accrued interest is not just added to the principal amount but also earns additional interest in the following years. This compounding effect substantially boosts your investment in the long run. Furthermore, choosing to invest at an early stage provides you with ample time to investigate different investment opportunities and establish a solid financial strategy.
Parents can consider various investment options such as mutual funds, unit-linked insurance plans (ULIPs), Sukanya Samriddhi Yojana (for girl child), or Public Provident Fund (PPF), among others.
Also Read: Income Tax: Invest before March 31 in these tax saving instruments to avail exemption When considering investments for their children, many parents often lean towards being overly cautious about how and where to allocate their funds, leading them to opt for PPF investments. Consistently investing over a period of 15 years or longer can enable parents to accumulate a significant sum to fund their children’s higher education. This can be understood with the help of the following example.
