Choose Rs 10,000 SIP Over Education Loan: CA Reveals How Parents Can Save Lakhs
Last Updated:October 02, 2025, 17:37 IST
With planning from the outset, families can not only meet education expenses but also secure additional resources for their children’s aspirations
SIPs can grow even during withdrawal phase, reducing financial burden.
For many middle-class families, funding a child’s education can feel like an uphill battle, with parents often spending lakhs of rupees over the years. However, a simple yet disciplined investment strategy, if implemented early, could significantly reduce this financial burden, experts say.
Chartered accountant Nitin Kaushik, in a post traction on X (formerly Twitter), suggested that a systematic investment plan (SIP) started at a child’s birth can not only cover the entire cost of education but also leave additional funds for other needs. “99% parents burn lakhs on school fees without a plan,” Kaushik wrote on his X handle (@Finance_Bareek), adding, “What if a 10-year SIP could fund your child’s education almost free… and still leave lakhs for their dreams?”
Under Kaushik’s proposed method, parents begin a monthly SIP of Rs 10,000 at the time of their child’s birth, increasing the amount by 10% each year for 10 years before stopping contributions. From the child’s 10th year onwards, Rs 25,000 can be withdrawn monthly to meet education expenses until the child turns 22.
Assuming an average annual return of 12%, the initial investment of Rs 19.12 lakh over 10 years could grow to Rs 32.69 lakh, while total withdrawals of Rs 36 lakh over 12 years would still leave Rs 51 lakh in savings.
The advantage of this approach, Kaushik explains, lies in its alignment with a family’s income growth. “Start with Rs 10,000 per month, and by Year 10 you’re investing Rs 2.8 lakh annually, aligned with promotions and salary hikes,” he said.
The SIP Strategy•Start a SIP of ₹10,000/month.•Increase by 10% every year for 10 years.•Stop new contributions after 10 years.•Withdraw ₹25,000/month from age 10–22 to cover fees.•Assumed CAGR: 12%— CA Nitin Kaushik (FCA) | LLB (@Finance_Bareek) October 1, 2025
Experts also highlight the benefit of this approach over traditional loans. Taking an education loan of Rs 36 lakh at 11% interest over 10 years would result in monthly payments of around Rs 50,000, doubling the outflow compared to the SIP method and adding an interest burden. In contrast, SIPs continue to grow even during the withdrawal phase.
Kaushik advices investing in low-cost index funds, keeping a portion for emergencies, and reviewing the portfolio annually. He emphasises that consistent and disciplined investing over a decade can yield results that even overtime work cannot match.
With planning from the outset, families can not only meet education expenses but also secure additional resources for their children’s aspirations. In a country where savings are hard-earned, this method offers a practical and hopeful solution, he said.
For parents willing to invest patiently and consistently, SIPs could transform the way middle-class families approach one of the most significant expenses of their lives.
October 02, 2025, 17:37 IST
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