Invest in your child's education with SIP

One aspect of being a parent that is a high priority is providing our children with the best education. Today, getting quality education means a lot of money. The best schools are expensive, and tuition fees are growing manifold. Most schools may hike their fees every year in line with rising inflation, which is likely to cut your pockets deep and can cause financial stress. Does lack of finances mean that you, as a parent, will have to compromise on providing your child with the best education? Well, not necessarily. With early and careful financial planning and investments, you can build on your existing income with an aim to give your children the future they deserve. 

Disciplined, consistent and long-term investments in mutual fund schemes can help you provide for your child's future. This can be accomplished by making small amounts of systematic investment plans or SIPs. 

Here is how SIPs can help:

1. Evaluate your budget: It's important to survey the prevailing cost of education in institutions you seek to get admission for your child. Take into account the inflation trends and your current income flow and savings and expenditures to determine how much corpus you may need and what can be the instalment amount you require for SIPs. 
2. Begin early: This is probably the first rule which can aid in ensuring that you meet the financial goals for your child. While there is no ideal age to start, one can ideally initiate SIPs once the child is born. This involves an early investment strategy keeping in mind the risk appetite and financial objective. SIPs can offer the power of compounding, which means the interest on your investments earned, if any, also earns an interest, which helps in building long-term potential corpus. So earlier the investment is initiated, the better.
3. Disciplined and regular approach: It is critical that parents be disciplined and regular in allocating funds for investments. One should opt for an SIP amount which is feasible and not heavy on the pocket. However, as income increases, one can review the frequency and the amount going into an SIP. This can further help in reaching your financial goals as planned. 

It's important to remember here that investments can also be made on behalf of a minor or in the child's name by a parent or court-appointed guardian. Further, one can consult a financial advisor to discover which mutual fund schemes are suitable for them to meet the objective of securing their child's education as per one's risk appetite. 

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These materials are not intended for distribution to or use by any person in any jurisdiction where such distribution would be contrary to local law or regulation. The distribution of this document in certain jurisdictions may be restricted or totally prohibited, and accordingly, persons who come into possession of this document are required to inform themselves about and observe any such restrictions. Investors may consult their financial advisor and/or tax advisor before making any investment decision. Investors may make any decision/ investment decision after necessary due diligence, understanding the risk appetite, and as per the financial objectives. 

SIP does not assure of any profit or guarantee protection against loss in a declining/upward market. Kotak Mahindra Asset Management Company Limited (“KMAMC”)/Kotak Mutual Funds is not guaranteeing or promising, or forecasting any returns/future performance.

Mutual Fund investments are subject to market risks, read all scheme-related documents carefully.