How to use the Education Calculator
- 1
Enter what the course would cost today, including fees and living costs if you want.
- 2
Enter your child's current age and the age at admission.
- 3
Set an education inflation rate and an assumed return.
- 4
Read the years to admission, the future course cost and the monthly SIP needed.
The formula
Future cost = C × (1 + i)^t; SIP = Future cost ÷ ([((1 + r)^n − 1) ÷ r] × (1 + r))C is today's course cost, i is education inflation, t is years until admission, r is the monthly return (annual ÷ 12 ÷ 100) and n is t × 12 months.
Worked example
A course that costs ₹15 lakh today, for a child now 5 who will join at 18, may cost about ₹51.78 lakh in 13 years at 10% education inflation. At an assumed 12% return, a SIP of about ₹13,775 a month may build that amount.
Tips
- Start as early as possible; every year of delay raises the monthly SIP noticeably.
- Plan separately for school fees, which are near-term, and higher education, which is long-term.
- Keep the education fund in your own name or the child's as a minor folio, and add a nominee.
Frequently asked questions
How much should I save monthly for my child's education?
It depends on the course, your child's age and the inflation you assume. For example, a ₹15 lakh course today for a 5-year-old may need about ₹13,775 a month at an assumed 12% return. Use the calculator with your own figures.
What inflation rate should I use for education costs?
Many parents use 8% to 10% a year, because professional course fees have tended to rise faster than general prices. A higher rate gives a safer target. If you are planning for study abroad, also allow for rupee depreciation against foreign currencies.
Can I invest in a mutual fund in my child's name?
Yes, you can open a minor folio in your child's name with a parent or legal guardian managing it. Payments are made from the minor's own bank account, which may be held jointly with the guardian. When the child turns 18, the folio moves to their name after the required KYC.
Should the education fund stay in equity until admission?
Usually not until the last day. As admission comes within two or three years, many parents move the money gradually into lower-volatility debt funds, so a market fall close to the admission date does not cut the amount you need.