How Much Should You Save for Your Child's Education in India? The Real SIP Math

Saving for your child's education in India means outrunning a cost that compounds faster than almost anything else you'll ever budget for – here's the actual number to put away each month, and why.

Why does a college degree cost so much more by the time your child gets there?

Because education inflation in India runs at roughly 10–12% a year for private schooling and higher education – roughly double the 4–6% general inflation most long-term household plans assume. The official CPI education sub-index looks far tamer (about 3% year-on-year as of April 2026), but that is because it is dragged down by near-static government-school fees; the private tuition, hostel and coaching costs most urban families actually pay have risen in double digits for years.

At 10–12%, costs roughly double every 6–7 years. A course costing ₹10 lakh today isn't ₹15 lakh in 18 years – it's closer to ₹55–65 lakh. This is the single most under-planned number in Indian family finance.

What will engineering, medicine, an MBA or a foreign degree actually cost by then?

Run today's ballpark costs through 10% annual inflation for 18 years and the numbers stop looking abstract fast. Here's the same course, priced today versus the year your newborn turns 18.

Source: indicative mid-points from Shiksha and Careers360 fee surveys and Leap Scholar's MS-in-USA cost guide (2026). Private B.Tech runs ₹12–15 lakh all-in; IIM flagship MBAs ₹17–27.5 lakh; private MBBS totals ₹50 lakh to over ₹1 crore (management/NRI-quota seats in states like Rajasthan cross ₹1.3 crore); a 2-yr US master's ₹57 lakh–₹1.2 crore. Treat these as planning ranges, not quotes.

How much SIP do you actually need to hit that number?

Back-solve from the target, don't front-solve from what feels affordable. Assuming a long-term equity SIP earning around 12% annually (a reasonable long-run assumption, not a guarantee – and before the 12.5% LTCG tax on gains above ₹1.25 lakh a year), here's what it takes to build the MBA corpus from the table above.

The catch is time, not amount. Delay the start by eight years – begin when your child is already 8, leaving a 10-year runway for the same ₹1.39 crore target – and the required SIP jumps to roughly ₹60,000/month, over three times as much, because compounding has far less runway. Waiting is the single most expensive decision in this plan. Run your own numbers on NYVO's SIP calculator before committing to a figure.

Sukanya Samriddhi, PPF or equity mutual funds – which should carry the load?

None of them alone – each solves a different part of the problem. Sukanya Samriddhi Yojana (SSY) gives you a safe, tax-free floor for a girl child; PPF gives similar safety with more flexibility; equity mutual funds give you the growth rate you actually need to outrun 10–12% education inflation, with more volatility along the way.

Source: Ministry of Finance small savings notification for Jul–Sep 2026 (SSY 8.2%, PPF 7.1%, via Business Today, 30 Jun 2026); ClearTax scheme guides (SSY, PPF). LTCG at 12.5% above ₹1.25 lakh effective 23 July 2024, unchanged as of July 2026. SSY withdrawal at 18 is capped at 50% of the previous financial year's balance.

Does starting early really change the outcome that much?

Yes – more than the choice of instrument does. A parent who starts a modest SIP the month their child is born is working with an 18-year compounding runway; one who starts at age 8 is working with 10. The rate of return matters less than the number of years it gets to compound for. Pick the vehicle mix once, automate the SIP, and let time do the rest.

Sources: Kotak Mutual Fund ("Education Inflation in India: Why Costs Rise Faster Than Income"); Ministry of Finance small savings interest rate notification, Jul–Sep 2026 (via Business Today, 30 Jun 2026); ClearTax (Sukanya Samriddhi Yojana, PPF, LTCG); Shiksha and Careers360 fee surveys; Leap Scholar MS-in-USA cost guide, 2026. Projections assume 10% education inflation and 12% equity returns – assumptions, not guarantees. NYVO Money is a SEBI-registered investment adviser; this article is education, not personalised advice.
Key source links: MoSPI CPI April 2026; DEA small savings rates; NSI small savings schemes; Income Tax capital gains guide.