As a parent, one of your biggest responsibilities is to provide the best possible education for your child. But the way the costs of education are rising, providing the best education can be difficult without proper planning. In fact, the cost of education is predicted to rise by around 10%-12% each year, according to the National Sample Survey Office.
Therefore, it is essential to start planning early for your child’s education. Here are some tips that can help you plan effectively.
The best time to start saving for your child’s education is the day they are born. This will give you enough time to save for the best education. Whether it via mutual funds or a fixed deposit, they are more likely to provide better results when offered more time for growth.
Take Advantage of Personal Banking Options
Opening a separate savings account dedicated to your child’s education will be a good decision when planning for their education. The best banks for savings accounts provide interest rates of up to 7%. What this means is that when you keep saving, your money continues to grow. You can also open a minor’s savings account for the amount your child may receive as gifts from relatives.
You can also consider other personal banking solutions, such as a fixed deposit or recurring deposit. They generally provide a higher rate of interest than a savings account. With recurring deposits, you also have the advantage of making small regular payments. You can choose to invest as little as ₹2,000 or as high as ₹75,000 in one go. Fixed and recurring deposits also provide tax-saving benefits.
There are excellent options for funding your child’s school education, tuition expenses and bus fees. But you must save regularly and save early.
Consider Mutual Funds
When it comes to higher education, the fees can be really high. For instance, the average cost of getting an MBA degree could go as high as ₹60 lakhs by 2025, according to a Times Graduate report. A savings account can prove to be insufficient at this stage. You need something that provides the chance of getting higher returns. Enter, mutual funds!
Mutual funds can provide much better interest rates than a savings account or a fixed deposit. They can also provide tax benefits. But, there is a degree of risk attached, since they are market-linked instruments. When investing in mutual funds, you can take advantage of the SIP route.
Look for Scholarships
When it comes to higher education, always be on the lookout for scholarships. While the government offers some, others are provided by the university itself. The scholarships can be provided on the basis of excellence in academics, sports, or extra-curricular activities.
With so many personal banking options out there, there is no need to get stressed. And if you need any further information, whether it is about how to open a savings account or which mutual funds to select, you can a financial expert and make your child’s future secure.