Hi, Diversified Equity Mutual Funds are best investment options for children education.
Here are some funds explained with examples. Your daughter is 5 years old. So, first you have to plan for her Graduation expenses and then Post Graduation Expenses.
1.Graduation: (e.g. Engineering)
Current Cost - Rs. 6 Lacs
Inflation : 10%
Future Cost after 13 Years: 20.71 Lacs
Expected Rate of Returns: 12%
Monthly Investment Required to achieve this goal: Rs. 5,565/-
OR
Lump Sum Investment Required to achieve this Goal: Rs. 4.75 Lacs
Suggested Funds:
1) DSP Blackrock Microcap Fund - 3,000/- per month
2) Kotak Select Focus Fund - 2,500/- per month
2. Post Graduation: (e.g. MBA)
Current Cost - Rs. 15 Lacs
Inflation : 10%
Future Cost after 17 Years: 75.8 Lacs
Expected Rate of Returns: 12%
Monthly Investment Required to achieve this goal: Rs. 11,465/-
OR
Lump Sum Investment Required to achieve this Goal: Rs. 11.04 Lacs
Suggested Funds:
1) Birla Sun Life Frontline Equity Fund - Rs. 6,000/- per month
2) HDFC Midcap Opportunities Fund - Rs. 5,000/- per month
Hope it helps!
Paz Marie Guanio