Merely creating a corpus is not enough for for your child's education planning. In the later years, there will be an annual, even quarterly, requirement of funds. This implies the need for regular cash flows. Investments, therefore, need to be planned so as to meet these financial demands.
As a thumb rule, for the maximum growth, investments for goals which are more than 10-15 years away should be made in equities. Two-three years prior to the goal, the corpus should be shifted to debt instruments.
When planning for your child's education:
As a thumb rule, for the maximum growth, investments for goals which are more than 10-15 years away should be made in equities. Two-three years prior to the goal, the corpus should be shifted to debt instruments.
When planning for your child's education:
- Start investing in equity early to enjoy the benefits of compounded returns
- Switch funds to safer instruments on the debt side, two-three years prior to requirement
- Instruments like FDs, MIPs and debt mutual funds can be considered
- Avoid illiquid instruments like Post Office Monthly Income Schemes
- In case of a shortfall in corpus, take an education loan
