SIP Planning: Can SIPs Help You Save ₹25 Lakh in 10 Yrs for Your Child’s Education?

As education costs continue to rise, planning for your child’s future has become more important than ever. Whether it’s a top-tier engineering institute, a medical college, or an international university, quality education demands significant financial backing. If your goal is to accumulate ₹25 lakh in 10 years, let’s break down how Systematic Investment Plan (SIPs) work and how they can help you build the required corpus over a decade. 

Why Aim for ₹25 Lakh? 

With inflation steadily increasing, the cost of higher education has nearly doubled in the last decade. For instance, a professional undergraduate course that costs ₹10–12 lakh today may cost you ₹20–25 lakh in ten years. Add to that accommodation, travel, and miscellaneous expenses, and you may find yourself looking at an even higher financial goal. 

Hence, setting a target of ₹25 lakh over 10 years is not only realistic but necessary for securing your child’s academic aspirations. If your child’s preferred course currently costs around ₹20 lakh, be sure to factor in inflation before finalising your investment target. 

SIP Calculation: Reaching ₹25 Lakh in 10 Years 

When planning for your child’s future education expenses, understanding how much to invest monthly is key. Let’s say your goal is to accumulate ₹25 lakh in the next 10 years, with the help of SIPs.  

Use an SIP Calculator and start the calculations.  

Assume you are planning to invest ₹10,000 per month in an SIP for the next 10 years and the expected rate of return is 12%. In this case, the total value of your investment after 10 years will be ₹23,23,391, where you could be short of ₹2 lakh from your target.  

Try increasing your monthly investment by ₹1,000, then your total investment value in 10 years could be ₹25,55,730. Here, the total investment amount is ₹13,20,000, and the estimated returns are about ₹12,35,730, which is almost equal to the investment amount.  

This calculation is based on compound interest, where your investments grow not just on the principal but also on the returns generated over time. An SIP calculator can help you arrive at this figure with accuracy, factoring in tenure and expected return rates. 

However, if you are slightly conservative in your return expectations and project a 10% annual return instead, the SIP amount needs to be adjusted accordingly. In that case, you would need to invest around ₹12,500 per month to meet the same ₹25 lakh target in the same time frame. 

The difference might seem small at first, but it has a considerable impact over the long term. Even a 1–2% variation in returns can significantly change your required monthly investment, highlighting the importance of setting realistic expectations and choosing the right funds based on your risk profile. 

Therefore, it’s essential to review your investment strategy periodically and make adjustments as needed. By starting early and investing consistently, even with modest amounts, you can confidently plan for your child’s higher education goals without financial strain when the time comes. 

Also Read: How a ₹15,000 Monthly SIP Can Help You Build ₹22.5 Crore Wealth? 

Conclusion 

Planning your child’s education is a long-term commitment. Whether your goal is ₹25 lakh or more, the right investment plan today can lay the foundation for a brighter tomorrow. 

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions.