Dear Readers,

We all wish to provide our children with the best things in the world, however, the secret to fulfill most dreams and goals lies in your finances.

It is imperative to step back and see whether you have planned for your Child’s Future! Your today may be perfect, but it is important to be prepared for tomorrow. One of the best gifts that any parent can give their child is the Gift of a Promising Future.

Thus, we at Richvik, present a small article on the Best gift to give your children.

While planning for your child’s future, it’s always better to start off early. This is because if you start saving and invest early, it will give you a larger time horizon to meet your financial goals such as Education or marriage and even build a bigger corpus.

Let us try to look at three situations to understand how parents can plan for their Child’s Future.

Situation 1:

A couple wishes to set up a corpus worth Rs. 2.5 Crore for their one month Old Son’s future, which they will gift the Son when he is 21 Years old. How much should they invest today in order to achieve the Financial Goal?

Situation 2:

A couple has a daughter aged 10 years. They want to plan for their daughter’s marriage and gift their daughter assets worth Rs. 2 crore on the eve of her marriage. They have an accumulated fund of Rs. 20 Lakhs and they wish to plan for the balance. How much should they invest now-onwards in order to reach the Financial Goal?

Situation 3:

A couple has a son aged 3 years. They wish to have a corpus of Rs. 1.5 Crore for their Son’s Education and other related expenses and gift the same to their Son when he will be 16 years old. How can they plan for the Son’s Education?

In all the above three situations, the parents wish to invest some amount today in order to secure a bright future for their children. Let us see the outcome of all the three situations:

Situation 1: Here the Child is an infant and parents have a time span of 18 – 21 years to achieve a goal.



Daughter’s Age

1 month

Cost of education in today’s value

 2.5 Crores

Monthly Investment if invested @ 16% p.a. for 21 Years



Situation 2: Here the child is 3 Years old and the parents have a good 13 years to accumulate the funds.



Son’s Age

3 Years

Cost of education in future

 1.5 Crore

Time Span to set up the Corpus

 13 Years

Monthly Investment if invested @ 16% p.a.



Situation 3: In the third situation, the daughter is 10 years old and the parents have 15 years to accumulate the corpus.



Daughter’s Age

10 Years

Time Span to set up the Corpus

15 Years

Corpus to be saved

 1.8 Crore

Monthly Investment if invested @ 16% p.a. for 15 Years



Analysis of the Table:

  1. When we look at the individual amount as an whole, it seems like a huge corpus to accumulate. However, when we break it down to monthly installments, the amount comes to a few thousands of Rupees.
  2. In the first case, if the Parents invest an amount of Rs. 13,500 every month in an Equity Scheme fetching 16% returns, then in a time span of 20 to 21 years, they can achieve a goal of Rs. 2.5 Crores.
  3. In the Second case, if the parents invest an amount of Rs. 17,800 ever month in an Equity Scheme fetching 16%, the goal of Rs. 1.5 Crore can be easily achieved in a time span of 12 to 13 years.
  4. In the third example, if the parents invest Rs. 25,000 in Equity Scheme fetching 16%, the goal of 1.8 Crore can be easily achieved.


How can we achieve these Goals?

It is extremely important to decide how much we wish to save for our child, after making arrangement for self’s retirement and health corpus. Once that is done, it is always feasible to take advice from a financial planner and invest in the right scheme for your child.

If you begin early, i.e. right after your child is born, you can invest in equities, since there is longevity and time period till the child joins college. And in the long period, markets have given great results in the past.

If you start the investment at a later stage, gradually Debt and Equity ratio can be balanced to reach the desired returns.


How can we, at RichVik help you?

We, at RichVik, provide end to end goal based financial planning services to our clients. Based on the requirement and goals of the clients, we create financial plan for the Investor and recommend the best schemes to suit their Risk Appetite and Financial Goals.


What schemes are available for Children’s Future planning?

There as many schemes introduced by Mutual Fund houses for child’s future planning. Some of the schemes available for Children’s future are HDFC Children’s Gift Fund- Investment Plan, Templeton India Children’s Asset – Gift Plan, ICICI Pru Child Care Plan- Study Plan and so on.


Safeguarding one’s Future:

It is important to note that along with securing a bright future for your child, planning should be done for one’s self and spouse. The savings should be allocated in such a manner that Children’s Plan and one’s health Corpus does not deflate one’s Nest Egg i.e. Retirement Fund.

To know more on investment and Children’s Planning, feel free to reach us.


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