SIP for Child

What is SIP for a Child?

A Systematic Investment Plan (SIP) for a child is a disciplined way to save and invest regularly for a child’s future financial needs, like education or marriage. Parents can start a SIP in mutual funds and invest small amounts monthly or quarterly. Over time, these investments grow through the power of compounding, helping build a significant corpus. What’s unique is that both parents and children can invest together. As children grow older, they can continue the SIP started by their parents, creating a habit of financial discipline and long-term wealth creation.

SIP Calculator

I know my investment amount I know my goal amount

Monthly SIP Yearly SIP Lumpsum

I want to invest Pro Tip

Financial experts suggest that a person should invest 10-15% of their monthly income for long-term financial growth

/Month

I want to invest for Pro Tip

Financial experts suggest that individuals should ideally invest for a period of 5 to 10 years, or even longer, to maximize the benefits of compounding and navigate market fluctuations effectively

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Expected return Pro Tip

Top 25% of investors consistently generate more than 12% return

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Total Wealth ₹22.4 L

View Plans

I want to save

I want to invest for Pro Tip

Financial experts suggest that individuals should ideally invest for a period of 5 to 10 years, or even longer, to maximize the benefits of compounding and navigate market fluctuations effectively

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Expected return Pro Tip

Top 25% of investors consistently generate more than 12% return

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Monthly Investment ₹22.4 L

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Top Funds with High Returns (Past 7 Years)

16.82%

High Growth Fund

16.57%

Top 200 Fund

13.25%

Accelerator Mid-Cap Fund II

13.43%

Opportunities Fund

9.13%

Growth Plus Fund

11.71%

Accelerator Fund

12.71%

Grow Money Plus Fund

14.1%

Multiplier

10.7%

Equity Top 250 Fund

11.43%

Future Apex Fund

10.91%

Opportunities Fund

12.95%

Frontline Equity Fund

15.2%

Virtue II

9.52%

Pension Dynamic Equity Fund

11.03%

Top 300 Fund

9.19%

Blue-Chip Equity Fund

How an SIP for Child Work?

SIP is an excellent way to save for your child’s future while building financial discipline. Following steps show how an best SIP plan for child works:

• Set Clear Financial Goals: Decide the goal, like your child’s education or marriage, and calculate how much money you need and by when.

• Pick the Right Mutual Fund: Choose a fund that matches your risk level and time frame, such as equity funds or child-specific funds for long-term growth.

• Invest Regularly: Parents can invest each month, and older children can also start a SIP with their savings or pocket money, helping them learn financial habits.

• Benefit from Compounding: With SIPs, money grows over time through compounding, making early investments more valuable in the long run.

• Get Tax Benefits: Certain funds like ELSS offer tax deductions under Section 80C, and returns are taxed based on how long you hold the investment.

• Review and Increase Investments: Check the progress regularly and increase the SIP amount as your goals or inflation changes.

SIP Calculator to Estimate Investment Amount for Child 

A SIP calculator helps you calculate how much you need to invest regularly for your child's future goals like education or marriage. Parents can use this tool to decide the right amount to invest and how long to invest.

• SIP Calculator for Child Fund: Select “I Know My Goal Amount” option in the calculator- 

  • Child Corpus Estimate: ₹30,00,000 (child fund)

  • Investment Duration: 18 years

  • Expected Return: 15% annually.

• SIP Calculator Results: The calculator will show you the following results:

  • Monthly Investment Required: ₹3,050

  • Total Investment: ₹6,60,000

  • Amount Required: ₹30,00,000

  • Wealth Gained from SIP: ₹23,40,000

Key Points to Consider Before Investing in a SIP for Child 

Keep the following points in mind before starting to invest in a SIP for child:

• Start Early: Start investing as early as possible so your money can grow over time with the power of compounding.

• Set Clear Goals: Decide what you are saving for, like your child’s education or marriage, and set a target amount and time frame.

• Pick the Right Fund: Choose a mutual fund that suits your risk level and time frame, such as equity or child-focused funds for long-term growth.

• Decide on SIP Amount: Pick an amount you can invest regularly without strain, keeping in mind your budget and future needs.

• Tax Savings: Some SIPs, like ULIP and ELSS, offer tax benefits under Section 80C, which helps you save on taxes while investing.

• Monitor Your Investment: Keep track of how your SIP is performing and make changes if needed to stay on track with your goals.

Conclusion

A SIP for your child is a smart and disciplined way to secure their financial future. It allows parents and even children to invest regularly and benefit from the power of compounding. SIPs continue to be a popular option for long-term goals like education or marriage, offering flexibility and steady growth. By starting early, parents and children can build a strong financial corpus together, making it a collaborative journey towards achieving dreams while cultivating healthy financial habits.