A proactive approach in earlier years can make you tension free for your child's future needs. Every parent does what they can best do to secure their child's future and when it comes to accumulation some good enough money that can come in handy at a later date for your child's education or other big ticket expenses, you need to extra cautious and alert.
Invest via SIP in mutual funds: Mutual funds that too via SIP route which is a disciplined way to investment is time and again suggested by experts to provide you enough corpus if you have a time horizon of around 20 years. In the last 4 years or so equity mutual gains have managed to provide appx 15% returns.
It is suggested to bet in equity mutual funds only if your child's higher education is to begin 5 years from now. Also, in the case when the market sees correction you can invest a lump sum amount to further take on the advantage of rupee cost averaging and hence better rates for you and sooner achievement of your goal.
Multi cap funds can be another good bet: It is seen that the cycle considering the return aspect from mutual funds is generally of 4 years. And during this period the returns for the investor do not falter. A choice of 2 or say 3 multi cap funds which invests across sectors as well as market capitalization have provided annualized average gains to the tune of approx 22% in the last 5 years time.
ULIPs and child plans or other fixed instruments will fail to suffice: The escalating cost of education at the primary level itself is a cause of concern in urban and metro cities which draws the attention to as far as possible create a sizable corpus for your child's higher education. So, instead of the regular child plans floated in the market or other instruments such as the PPF, you may be better off to beat inflation as well as accumulate enough for your child with investment in mutual funds.
Do not forget to lap up the term plan: It is highly desirable to opt for a term plan cover that is enough to meet your liabilities in respect of your family if in case you happen to meet untimely death. There are plans that even pay towards your investment or waive the premium in case of such exigencies.