Financial educator Mrin Agarwal suggests a systematic monthly investment strategy to build an education fund for newborns [1].
Planning for higher education early allows parents to leverage compound growth and mitigate the impact of rising tuition costs. By starting at birth, families can create a sustainable funding path without relying solely on high-interest loans later.
Agarwal, the director at Finsafe India, said the approach during an interview with CNBC-TV18 [1]. He recommended a monthly investment of ₹5,000 [1]. This strategy is designed to operate over an 18-year investment horizon [1].
To achieve this goal, parents can utilize diversified mutual funds, or custodial accounts. These vehicles allow a guardian to manage assets on behalf of a minor until the child reaches adulthood. Depending on the state, these custodial accounts can be transferred to the child between 18 and 25 years of age [2].
Building a corpus through a systematic investment plan reduces the risk associated with market volatility. By investing a fixed amount regularly, parents avoid the need to time the market, a strategy that often leads to better long-term outcomes for education savings.
Agarwal said the focus should remain on the long-term horizon to ensure the fund grows sufficiently to meet the costs of higher education [1].
“Parents can consider a systematic ₹5,000 monthly investment over an 18‑year horizon.”
This approach emphasizes the shift toward disciplined, long-term equity exposure over traditional savings accounts. By utilizing a 18-year window, investors can better absorb market fluctuations while targeting the specific inflation rates associated with educational costs, which often outpace general consumer price indices.
