How to Pick a Savings Plan When Your Child’s College Is Still 15 Years Away?

Planning for a child’s higher education is one of the most important financial goals for Indian families. With fees rising at a rapid pace, parents often worry about whether their savings will be enough when the time comes. If your child’s college admission is still 15 years away, you have a rare advantage: time. With proper planning, you can let your money grow steadily, while also securing your child’s future against uncertainties.

Why 15 Years Is the Perfect Window

Fifteen years may seem like a long way off, but in investing, this is an excellent horizon. It allows the power of compounding to work in your favour. Even a modest monthly contribution, when invested in the right savings plan, can multiply several times over the years. More importantly, this long duration lets you take some exposure to growth-oriented investments while gradually reducing risk as the goal approaches.

Estimating How Much You Will Need

The first step in selecting a savings plan is to estimate the cost of education. Tuition fees in India rise by about 8% to 10% annually. A course that costs ₹10 lakh today could cost around ₹30–35 lakh after 15 years. For overseas education, the figure could be even higher once you add living expenses. Having a realistic estimate helps you decide how much to set aside every month. Using an investment calculator to give you a clear picture of the required savings.

Balancing Growth with Security

When the goal is 15 years away, you do not have to put all your money in safe but low-return instruments. You can afford to include equity-linked investments that have the potential to outpace inflation. At the same time, you need a base of secure products that provide stability and assured returns. The best strategy lies in combining both growth and security in one portfolio.

Savings Options to Consider

1. Child Insurance Plans

These are designed to serve dual purposes. They build a fund for higher education while also offering life cover. If something happens to the parent, many policies waive future premiums and continue the plan, ensuring the child’s education fund remains intact. This safety net makes child plans a reliable core option.

2. Mutual Funds via SIPs

Systematic Investment Plans (SIPs) in equity mutual funds are among the most effective ways to build wealth over 15 years. They allow you to invest small amounts regularly, benefit from rupee cost averaging and harness compounding. For parents comfortable with some risk, equity mutual funds can significantly boost the final education corpus.

3. Public Provident Fund (PPF)

The PPF remains a trusted choice for safe and tax-free savings. It has a 15-year lock-in, which aligns well with your timeline. While the returns are lower compared to equities, the safety of government backing and exemption from tax make it a stable component in your child’s portfolio.

4. Sukanya Samriddhi Yojana (SSY)

For parents of daughters, the SSY scheme offers one of the highest guaranteed returns among government products. The maturity period fits well with long-term goals like higher education. Along with tax benefits under Section 80C, it ensures a disciplined and secure way to save.

5. Gold (Sovereign Gold Bonds or ETFs)

Gold has traditionally been a hedge against inflation. Allocating a small portion of savings to gold can protect your portfolio from currency fluctuations and economic uncertainty. Sovereign Gold Bonds provide the added advantage of interest income along with capital appreciation.

6. Fixed Deposits

Bank FDs provide safety and liquidity. However, with inflation-adjusted returns often on the lower side, they are best used for short-term needs as your child nears college rather than as the mainstay of a 15-year plan.

Factors That Should Guide Your Choice

• Risk Appetite

With 15 years in hand, equity allocation is not only possible but advisable. Over time, the risk smooths out and returns are likely to beat inflation. As college admission nears, you can gradually shift funds to safer products.

• Flexibility

Income levels may change and unexpected expenses may arise. Plans that allow flexible premiums, top-ups or partial withdrawals give you breathing space without disrupting the goal.

• Tax Efficiency

Child insurance plans, PPF and SSY qualify for deductions under Section 80C. In addition, the maturity benefits of many child plans are exempt under Section 10(10D). These tax benefits make a noticeable difference in long-term planning.

• Inflation Protection

A savings plan must not only grow but also stay ahead of inflation. Equity funds and certain hybrid products offer the potential to outpace rising costs, making them essential in a long-horizon portfolio.

• Security for the Child

Plans with life cover or premium waiver benefits ensure that even if something happens to you, your child’s education fund remains intact. This feature can be the deciding factor for many parents.

Building a Balanced Strategy

The most practical way forward is diversification. For example, you could allocate 50% of savings to SIPs in equity mutual funds for growth, 30% to PPF or SSY for stability and tax benefits, 10% to gold for diversification and 10% to a child insurance plan for protection. As the college years approach, gradually move funds from equities into safer instruments like deposits or bonds to lock in gains and reduce risk.

Why Starting Early Changes Everything

The biggest advantage you have is time. A 15-year horizon allows you to start with smaller contributions and still accumulate a large fund. For instance, a SIP of ₹5,000 per month can grow to more than ₹25 lakh in 15 years at a 12% return. If you delay by even five years, the same SIP will build a corpus less than half that amount. Early action ensures that you do not face last-minute pressure.

Final Thoughts

Picking a savings plan when your child’s college is still 15 years away is about striking the right balance. You need growth to beat inflation, security to safeguard the goal and protection to cover uncertainties. No single plan checks all boxes, but a thoughtful mix of child insurance, mutual funds, government-backed schemes and gold can create a robust strategy. By starting today and staying consistent, you can confidently secure your child’s future education without compromising on their aspirations.