How much should I save for my child's education?

Last reviewed: 26 Oct 2026 · Noema Research · 4 min read

Parents often save a round number without knowing the target. Start with today's cost, grow it at education inflation, then work out the monthly SIP. A course that costs ₹20,00,000 today may cost about ₹55,20,000 in 15 years at 7% education inflation. Reaching that at 11% a year needs a SIP of about ₹12,700 a month, or about ₹7,200 if you raise it 10% each year. Estimates, not predictions.

Create an account to save this as an Education goal.

Your monthly SIP

Example values

Your monthly SIP

About ₹12,700 a month

Target: about ₹55,20,000 in future rupees in 15 years

Estimates, not predictions

Why a round number falls short

A round monthly saving can feel disciplined, but without a future cost target it may miss the date or the amount. Price the course in today's rupees, allow for education inflation, then calculate the monthly contribution. Estimates, not predictions.

Step 1: price the course today

Costs depend on course, institution and living arrangements. Use a range, then choose a goal you can revise.

Indicative cost today, total course, today's rupees. Estimates, not predictions.
PathRange
Undergraduate in India, public₹2,00,000 to ₹8,00,000
Undergraduate in India, private professional₹10,00,000 to ₹30,00,000
Postgraduate abroad₹40,00,000 to ₹80,00,000

Private engineering can be about ₹12 lakh to ₹25 lakh including fees and living costs. Private MBBS may be ₹50 lakh to about ₹1.5 crore, a higher goal option. Government seats cost far less; planning for a private path can leave a government seat as a bonus. Estimates, not predictions.

Step 2: grow it at education inflation

Education costs may rise faster than general prices. Inflate the amount you choose to the year the course begins, using a rate suited to the course and country.

Step 3: the monthly SIP

For a ₹20,00,000 course cost today and 7% education inflation, the target in 15 years is about ₹55,20,000. At 11% return, the flat monthly SIP is about ₹12,700. Formula: SIP = gap × r / ((1 + r)^n minus 1), where r = 1.11^(1/12) minus 1. Estimates, not predictions.

Monthly SIP at 11% for a course costing ₹20,00,000 today, 7% education inflation. Estimates, not predictions.
Years leftTarget (future rupees)Flat SIP
15about ₹55,20,000about ₹12,700
10about ₹39,30,000about ₹18,700
5about ₹28,10,000about ₹35,800

Compare other SIP timelines.

Shift to debt as the date nears

A market fall near the fee date can disrupt a plan. Start moving money towards debt about three years before it is needed; keep money needed within one to three years out of equity.

Plans sold as child plans

Bundled insurance and investment can cost more and make each part harder to assess. Consider separate term cover and a goal SIP.

Common mistakes

  • Using general inflation for a course with different cost increases.
  • Starting late and assuming the same monthly amount will still work.
  • Staying in equity in the final year.
  • Mixing education savings with retirement savings.

FAQ

How much SIP is needed for a child's education?+

It depends on today's course cost, years left, education inflation, return assumption and what you have already saved. Estimate the future target, then calculate the monthly SIP. Estimates, not predictions.

What inflation should I use for education costs?+

Use a planning estimate that fits the course and country. The default here is 7% a year; actual costs may differ.

Should I use PPF or SIP for my child's education?+

Choose based on time horizon, risk and tax treatment. A diversified SIP may suit a longer goal, while money needed soon generally calls for lower volatility. Compare the available tax saving options.

When should I move education money out of equity?+

Consider starting the shift about three years before the date, and keep money needed in the next one to three years out of equity.

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