SIP Calculator: How To Create Rs 50 Lakh–Rs 1 Cr Corpus Over 10–15 Years For Child's Education?

Usually, setting up a SIP around the age of 1 to 5 years is optimal as it provides a longer investment time of 15 to 20 years. This investment period takes advantage of the benefits of compounding, easing the monthly financial strain. Starting early enhances ease of contribution, ensures robust growth of investment over time, and lessens volatile market impacts. If this decision is delayed, ROI is constrained and investment stress increases alongside monthly contributions. SIPs facilitate better financial preparedness and stability before pursuing studies internationally, as tuition fees and currency rates tend to fluctuate.

When should parents ideally start a SIP if they're targeting overseas education for their child?

The simple answer would be as early as possible. All young parents should start saving for their child's education, ideally when their child is 3-5 years old. That gives parents a 12-15 year runway to build a robust education fund. Starting early ensures you benefit from the power of compounding and can invest smaller monthly amounts without stress.

"If you start when your child is 3, and you have 15 years before his or her college, to build Rs 1 crore corpus, you need to invest just Rs 20,000/month at a 12% CAGR. To build Rs 2 crore a SIP of Rs 40,000/month can suffice. But if you delay by even five years, the monthly SIP jumps dramatically-to Rs 33,000/month for the same Rs 1 crore goal over 10 years," said Aditya Agarwala, Co-founder of Invest4edu.

SIP Calculator

To achieve a corpus of Rs 50 lakhs to Rs 1 crore in 10-15 years through SIPs, monthly contributions must correspond with the investment period and returns.

"With a return of approximately 12% annually, a monthly investment of Rs 12,000-Rs 15,000 can yield a Rs 50 lakh corpus in 15 years. If your goal is to reach Rs 1 crore in the same time frame, investments of Rs 25,000-Rs 30,000 monthly are necessary. If trying to reach these goals in a 10-year span, these investments would need to increase to a striking Rs 30,000-Rs 50,000 monthly. It is necessary to review these plans and adjust SIPs annually to cope with increasing costs due to inflationary tuition. Early planning is critical for affirmation and stress alleviation," said Kajal Dave Co-founder of LaunchED Global.

"To build a corpus of Rs 50 lakh to Rs 1 crore for overseas education, parents must align their SIP amount with their investment horizon and expected returns. Assuming a 12% annual return, investing Rs 8,800 per month for 15 years can generate approximately Rs 50 lakh, while Rs 17,500 per month can yield close to Rs 1 crore. If the time frame is shorter—say, 10 years—the required monthly investment rises significantly to Rs 21,700 for Rs 50 lakh and Rs 43,500 for Rs 1 crore. Starting early not only reduces the financial burden but also provides flexibility to adjust for inflation, currency fluctuations, and evolving academic goals," commented Ingood founder Rohit R Chauhan.

For parents targeting overseas education—typically costing between Rs 50 lakh to Rs 1 crore or more—starting a SIP as early as possible is critical. Ideally, parents should begin when the child is between 3 to 5 years old, providing a 12-15 year investment window.

"This allows them to benefit from compounding and manage currency and tuition inflation, which can average 5-7% annually. Early planning reduces monthly outflows and cushions market volatility. For example, starting a Rs 15,000 monthly SIP at 12% annual returns over 15 years can build a corpus of approximately Rs 75 lakh," commented Rohit R Chauhan.

From Dreams to Degrees: How SIPs Empower Indian Families to Fund Global Education

Over thirteen lakh Indian students are pursuing higher education abroad as of 2024. This marks a significant increase from previous years. The dream of studying abroad is shared by lakhs of Indian students and their families. However, over the last decade, international education costs have surged 6-8% annually.

"A four-year undergraduate program today in the US can cost anywhere between Rs 1 crore to Rs 1.5 crore and in 5 years from now it can cost Rs 2 crore or more. Add to that living expenses, currency depreciation, travel, and insurance, it's not hard to see how quickly this becomes overwhelming for families without a clear financial plan," commented Aditya Agarwala, Co-founder of Invest4edu.

This is where Systematic Investment Plans (SIPs) become a game-changer. They allow parents to accumulate a sizable education corpus without disrupting other financial goals or resorting to expensive loans and also benefit from the rupee cost averaging.

Conclusion

The key to building a successful education fund is discipline, diversification, and early action. SIPs allow you to invest in a mix of mutual funds, equity, hybrid, or international funds based on your risk appetite and time horizon.

Disclaimer

The recommendations made above are by market analysts and are not advised by either the author, nor GoodReturns. The author, nor the brokerage firm nor GoodReturns would be liable for any losses caused as a result of decisions based on this write-up. Goodreturns.in advises users to consult with certified experts before making any investment decision.