How to Fund your Child's Education through Mutual Fund Child Saving Plans?
Planning for child’s future education is a primary concern for every parent. For securing you child future, as a parent your first priority is to have a sizeable amount as a saving for his or her education. To attain such saving objectives for your child’s education, investment in mutual fund schemes emerges as a fantastic saving option. Investment in best child saving plan through mutual funds will fund higher education costs for your child future’s education. Hera re the major points which must be taken into consideration while starting saving for your child’s educational expenses:
Have a head start:- While planning for your child’s future, firstly you must have a head-start and neglecting the natural tendency to postpone the planning due to non-availability of resources. The best way to start planning for your child’s education is to start early investment in mutual funds as mutual funds has an ability to make a huge difference in the final sum of your investment with its amazing compounding power.
Set a Goal before start your Investing:- When you start investing in mutual fund schemes for your child’s future education, as a parent you should set an end goal in your mind. It can be easily done by setting the calculations base on the current costs. You saving for your child’s educational future expense should not disturb your monthly budget and must cover all the expenses in a mean-time.
Invest using SIP methodology:- Investment in SIP or systematic investment plan is the most preferable method to start saving for any financial goal. In SIP method of mutual fund investment, an investor just needs to invest a specific amount on a regular basis. Also, here an investor himself decides the amount that he is comfortable in investing. Such regular investment on a saving plan plays a vital role in protecting the investor against market fluctuations. Mutual fund investments through SIP methodology always benefits investors financially after the successive completion of plan. Investing is Systematic Investment Plan always a profitable decision if it is planned for a long term goal. However, if you’re planning to buy any short - term plan for your child’s future education then such decision may not give you a desirable profit than long term SIP plans.
Choose Systematic Transfer Plan:- When you start saving for your child’s future education, you can go for STP or Systematic Transfer Plan as a investment option which is quite similar to SIP investment. In STP investment, for an investor, there is a provision of transferring the lump sum amount invested in a single fund to various debt funds and equity funds in order to avoid risk of market fluctuations. In Systematic Transfer Plan, investors can freely deposit their returns in a short-term debt fund and can diversify the mutual fund portfolio with minimum risk option. Through STP, as an investor you’ll not only get the returns for the transferred equity fund but can also keep your fund protected by buying less units at a higher NAV and vice versa.
For a parent, it is always an encouraging action to start saving for the child’s education through mutual fund schemes. So, consult your financial advisor right now to get details of best mutual funds plan to cater to long term financial goals.
Mr. Ajay Kumar Jain, M.Sc, Chairman And Managing Director
Being the Chairman And Managing Director, he focuses on holistic investment planning and wealth management and tries to make investment planning simpler for retail and HNI investors. Investor education is one of the prime things that Mr. Ajay Jain focuses on as he believes financial education is the foundation of successful investing. With over two decades of experience, Mr. Jain has made a mark in the Indian mutual fund industry due to his compassion and sheer hard work.