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ICICI Prudential Child Care Plan Gift Plan (G) 7.5% 6.67% Invest
UTI Children's Career Fund-Investment Plan (G) 10.51% 7.85% Invest
SBI Magnum Childrens Benefit Fund (G) 9.1% 10.53% Invest
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Nov 21, 2018 14 min read

Gift Foreign Education to Your Child. Know How!

Read this blog to know the best plans to invest in to finance your child’s foreign education.

Although there are a number of investment options present in the Indian market, mutual fund is the new trending option that will help you earn the maximum returns. There are a number of innovative investment schemes to park your money which will help you earn attractive returns, and therefore reach the required amount. You may invest in these schemes according to your portfolio’s requirement via different modes of investment, whichever suits your investment well. In the coming blog, you will get to read about how children’s fund can help you in earning the right amount to enable you to gift the foreign education to your child. But first, let’s read about the top colleges around the world and the fee that is required to be payed for the opted courses.

Best Foreign Courses, Colleges, Current Fee and the Future Fee

Below is the table showing the top universities and the undergraduate courses from which you can select the one that you want. Given further is the course fee as on June 12th, 2018. This fee is likely to increase or get inflated, therefore the inflated amount after ten and fifteen years is also mentioned in the table. Here the inflation rate has been taken as 7%. Considering the fact that Indian currency is Rs., the inflated fee is also shown in Rupees for your convenience.

Course NameCollege NameCountryFeesInflated Fees (After 10 yrs.)Inflated Fees (After 15 yrs.)Inflated Fees (After 10 yrs. in Rs.)Inflated Fees (After 15 yrs. in Rs.)
All UG Courses Harvard University US US$ 46,340 US$ 91157.79 US$ 127853.52 61,64,089.76 86,45,455.02
All UG Courses Stanford University US US$ 50,703 US$ 99740.48 US$ 139891.18 67,44,451.26 94,59,441.59
Engineering (UG) Imperial College London UK UK£ 29,000 UK£ 57047.39 UK£ 80011.91 51,55,298.47 72,30,572.291
Management (UG) Cambridge University UK UK£ 30,678 UK£ 60348.27 UK£ 84641.57 54,53,594.7 76,48,948.64
Computer Science (UG) University of Oxford UK UK£ 31,455 UK£ 61876.75 UK£ 86785.34 55,91,721.45 78,42,678.35
*As on June 12th, 2018

To arrange the amount you need to plan the investment. There are child future plans available in the market by different AMCs from which you can select the one that you find to be the most appropriate. In the coming points, you will get to read about what children’s funds are; followed by the top plans to invest in.

What Are Child Future Plans?

These are the open-ended schemes that have a lock-in period of five years or till the child reaches the age of majority whichever is earlier. These funds have been designed specially to fulfill the investment requirements by parents for their children.


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Top Child Future Plans to Invest in 2018

Here are the top three children’s fund that have been shortlisted after conducting research on the basis of different parameters. You may select the best one as per your requirement.


ICICI Prudential Child Care Fund - Gift Plan (G)

This scheme is for investors who are willing to earn long-term capital appreciation through investment in equity and equity related instruments, debt and money market instruments.

Associated Risk: The risk involved in this scheme is moderately high on the principal amount invested. Therefore, only aggressive investors or the ones who can bear this much risk should invest in it.

Basic Information
ParametersICICI Prudential Child Care Fund - Gift Plan (G)
Category Hybrid : Aggressive Hybrid
Benchmark NIFTY 50 Hybrid Composite Debt 65:35
Launch Date 8/31/2001
Asset Size Rs. 591 crore(As on Oct 31, 2018)
Fund Managers Ashwin Jain and Manish Banthia
Expense Ratio 2.44% (As on Oct 31, 2018)
Minimum Lumpsum Rs. 5000
Minimum SIP Rs. 100
Exit Load NIL

The minimum investment amount with which you may invest in this scheme is Rs. 100. However, to reach the amount as per the courses shown in the table mentioned earlier, you will require to invest Rs. 25000 monthly. Below two tables show the SIP investment done for a period of ten and fifteen years and the returns that one can generate as the maturity amount.

Fund NameNo. of YearsNo. of InstallmentsMonthly SIP AmountInvestment AmountSIP Value as on 31-03-2018XIRR (%)
ICICI Prudential Child Care Fund - Gift Plan (G) 10 120 25,000 30,00,000 65,00,108 14.78
Fund NameNo. of YearsNo. of InstallmentsMonthly SIP AmountInvestment AmountSIP Value as on 31-03-2018XIRR (%)
ICICI Prudential Child Care Fund - Gift Plan (G) 15 180 25,000 45,00,000 1,45,01,279 14.29

The minimum lumpsum investment amount with which you may start your investment in this scheme by ICICI Prudential Mutual Fund is Rs. 5000. Below two tables show that the lump sum investment done for a period of ten and fifteen years and the returns generated over time.

Fund NameNo. of YearsLump Sum AmountMaturity Value as on 31-03-2018CAGR (%)
ICICI Prudential Child Care Fund - Gift Plan (G) 10 20,00,000 58,53,819 11.33
Fund NameNo. of YearsLump Sum AmountMaturity Value as on 31-03-2018CAGR (%)
ICICI Prudential Child Care Fund - Gift Plan (G) 15 20,00,000 2,48,55,545 18.38


UTI Children’s Career Fund - Investment Plan (G)

This scheme has been launched with an investment objective to help investors earn long-term capital appreciation by investing 70% to 100% assets in equity and equity related instruments, and up to a maximum of 30% of the total assets in debt and money market instruments. Formerly, this scheme was known as UTI CCP Advantage Fund.

Associated Risk: As the investment here is mainly done in equity and equity related instruments, therefore the risk involved is moderately high on the principal amount invested.

Basic Information
ParametersUTI Children’s Career Fund - Investment Plan (G)
Category Equity : Multi Cap
Benchmark S&P BSE 200 TRI
Launch Date 5/12/2014
Asset Size Rs. 248 crore (As on Oct 31, 2018)
Fund Manager Kaushik Basu
Expense Ratio 2.63% (As on September 30th, 2018)
Minimum Lumpsum Rs. 5000
Minimum SIP Rs. 500
Exit Load 4% for redemption within 364 days, 3% for redemption between 365 - 1094 days, 1% for redemption between 1095 - 1824 days

You may invest in it both via SIP as well as lumpsum mode of investment. The minimum SIP amount with which you may start investing in this scheme is Rs. 500. To achieve the targeted amount so as to be able to pay for the foreign education of your kid, you will need to start investing early. Therefore, given below are the two tables showcasing the maturity amount that you may earn over 10 and 15 years, respectively.

Fund NameNo. of YearsNo. of InstallmentsMonthly SIP AmountInvestment AmountSIP Value as on 31-03-2018XIRR (%)
UTI Children’s Career Fund - Investment Plan (G) 10 120 25,000 30,00,000 60,72,268 13.5
Fund NameNo. of YearsNo. of InstallmentsMonthly SIP AmountInvestment AmountSIP Value as on 31-03-2018XIRR (%)
UTI Children’s Career Fund - Investment Plan (G) 15 170 25,000 42,50,000 1,03,27,502 11.74

If you are willing to invest via lumpsum mode, then you may do so with the minimum investment amount of Rs. 5000. Given below are the two tables of lump sum investment made for 10 and 15 years. You would need to invest at least 20,00,000 rupees as lumpsum to achieve the targeted amount.

Fund NameNo. of YearsLump Sum AmountMaturity Value as on 31-03-2018CAGR (%)
UTI Children’s Career Fund - Investment Plan (G) 10 20,00,000 62,56,076 12.07
Fund NameNo. of YearsLump Sum AmountMaturity Value as on 31-03-2018CAGR (%)
UTI Children’s Career Fund - Investment Plan (G) 15 20,00,000 72,56,360 9.55


SBI Magnum Children’s Benefit Fund (G)

Formerly known as SBI Magnum Children’s Benefit Plan, this scheme has been launched to help investors earn regular income and capital appreciation by investment in equity and equity related instruments which is actively managed.

Associated Risk: The risk involved in this scheme is moderately high on the principal amount invested. Therefore, only those investors should invest in it who can bear such risk.

Basic Information
ParametersSBI Magnum Children’s Benefit Fund (G)
Category Hybrid : Conservative Hybrid
Benchmark NIFTY 50 Hybrid Composite Debt 15:85
Launch Date 1/25/2002
Asset Size Rs. 60 crore (As on Oct 31, 2018)
Fund Manager Rajeev Radhakrishnan
Expense Ratio 2.66% (As on September 30th, 2018)
Minimum Lumpsum Rs. 5000
Minimum SIP Rs. 500
Exit Load 3% for redemption within 365 days, 2% for redemption between 366 - 730 days, 1% for redemption between 731 - 1095 days

SIP investment can help you earn well if done for a long tenure. The course fee of foreign colleges is normally high, and therefore one needs to invest in for a long-term. Investing through this mode will not only shield you against the short-term market volatility but will also help you avail the benefit of compounding benefit along with rupee-cost averaging. Following two tables are the ones that showcase the SIP investment done for a period of 10 and 15 years, respectively.

Fund NameNo. of YearsNo. of InstallmentsMonthly SIP AmountInvestment AmountSIP Value as on 31-03-2018XIRR (%)
SBI Magnum Children’s Benefit Fund (G) 10 120 25,000 30,00,000 61,38,677 13.70
Fund NameNo. of YearsNo. of InstallmentsMonthly SIP AmountInvestment AmountSIP Value as on 31-03-2018XIRR (%)
SBI Magnum Children’s Benefit Fund (G) 15 180 25,000 45,00,000 1,17,70,668 11.86

The minimum investment amount with which you may start investing in this scheme via lumpsum mode is Rs. 5000. Under this, all you need to do is pay once. The following two tables show the lumpsum investment made for the period of 10 and 15 years, respectively.

Fund NameNo. of YearsLump Sum AmountMaturity Value as on 31-03-2018CAGR (%)
SBI Magnum Children’s Benefit Fund (G) 10 20,00,000 60,29,354 11.65
Fund NameNo. of YearsLump Sum AmountMaturity Value as on 31-03-2018CAGR (%)
SBI Magnum Children’s Benefit Fund (G) 15 20,00,000 99,08,940 11.25

Benefits of Investing in a Child Future Plan

There are a number of benefits that come with an investment in children’s fund. Although there are many other investment options present in the market, investing in mutual funds can help you generate better returns with time, specially if the investment has been done via SIP mode. Some of the main benefits have been mentioned below.

  1. Top AMC Backing - All these plans are backed by the top asset management companies which have created a place in the market over time and have successfully earned the trust of investors.
  2. Specially Designed Plan - These plans have been specially designed keeping in mind the investment needs that every parent feels for his/her child. The focus is on helping the investors earn maximum so as to help parents in fulfilling their children’s dream.
  3. Open-Ended Schemes - All these schemes are the open-ended schemes which mean that the investor can buy or sell the units directly to the fund house itself and doesn’t have to worry about finding the right buyer or seller.
  4. Long-Term Goal - These schemes have been designed for a long-term investment and this is the reason that the major investment is being done in the equity and equity related instruments.
  5. Professionally Managed - These funds are managed by the highly educated and experienced fund managers. These are the people who are responsible for taking the investment decision and directing the assets in the right direction so as help the investors earn optimum returns on their investment.

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Conclusion

Hope you now know how to gift your child the foreign education and make him/her ready to face the world with confidence. Make sure that you have understood your portfolio’s requirement well before finalizing the schemes for investment. As the right way to invest can only be known once your investment goal is clear. If there is anything that you need to discuss about investment in children’s fund, then you may connect with our financial experts at MySIPonline. Alternatively, you can post any query related to the regular funds, here.

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