Monthly Saving Schemes for Your Child’s Education

Why is it Important to Have a Child Savings Plan?

A child savings plan allows you to save money for your child's future. It is an easy way to make sure you are prepared for large expenses such as schooling, college education, wedding expenses, or even medical emergencies. Think of the plan as a safety net. If something happens to the parent, the child receives financial support to continue their journey..

These plans allow you to save monthly, quarterly, half yearly or yearly. The plans may also provide guaranteed* returns or growth linked to market performance like ULIPs. Over time, your savings grow while protecting your child's ambition. So, whether it is for school admission or a bigger goal in their career, a child savings plan provides a launch pad for a child's future ambitions without any worry.

Birth of the Child

The moment a child is born, there are new financial responsibilities. Along with the joy comes the need to plan for things like medical care, vaccinations, day care, and early learning costs. A child savings plan can help you get started right away. The earlier you start saving, the more time your money has to grow. Thanks to compound interest, even small amounts saved every month has the potential to become large sum by the time your child is ready for school or college.

Saving from birth also gives you enough time to build a corpus without stress. You don’t have to worry about arranging a large amount suddenly later. With a proper plan, you can save slowly and still reach your goals. Additionally, some plans also offer life coverage. It means that if something happens to the parent, the child can be still financially secure.

So, starting a savings plan at birth is not just smart—it’s a loving and responsible choice for your child’s future.

Education

A good education is one of the most valuable gifts you can give your child. But quality education comes with a cost. School fees, books, uniforms, extra classes, and extracurricular activities can all add up quickly. A child savings plan helps you manage these expenses without stress.

Here’s how it helps:

• You can start saving early to match future school expenses.
• Monthly savings help you stay prepared for fee hikes.
• It keeps your savings separate and focused on one goal—your child’s education.

With a steady saving habit, you can give your child the learning environment they deserve, without worrying about money.

Higher Education

As your child grows, the cost of college or professional courses can become very high. Whether they choose engineering, medicine, law, or arts, every path needs financial support. A child savings plan can help you stay ready for that day.

Here’s how it supports higher education:

• Covers tuition fees, hostel charges, books, and exam fees.
• Provides funds for coaching or special courses.
• Supports overseas education with long-term financial planning.
• Helps avoid the need for education loans.
• If the plan includes survival benefits, parents can time the payouts to coincide with their child's college expenses.

Planning early ensures your child doesn’t miss out on learning opportunities due to a lack of money.

Marriage

Marriage is one of the most memorable events in your child’s life, but it can also be expensive. A child savings plan helps you prepare for these costs well in advance. By saving small amounts every month, you can build a good amount for your child’s big day.

This corpus can cover venue bookings, jewellery, clothes, and gifts. If your child plans to marry early in their career, this money becomes a great support. With the right plan, you can also get tax benefits while saving for this emotional and special milestone.

Emergencies

Life can bring sudden challenges—health issues, job loss, or family problems. A child savings plan helps you stay ready for such emergencies.

Here’s how it helps:

• Offers a lump sum if the parent passes away during the plan term.
• Some plans allow partial withdrawals for urgent needs.
• You can use the money for medical emergencies or unexpected costs.
• Life cover ensures your child’s future is not affected by your sudden loss.
• Gives peace of mind knowing help is there when needed most.

This way, your child stays protected—even when life takes unexpected turns.

How Do Child Savings Plans Work?

While child savings plans are primarily designed to help parents build a financial corpus for their child’s future through disciplined, long-term savings, it's important to note that not all such plans come with life insurance benefits. Some savings plans are purely investment-focused, while others combine savings with life insurance. In these insurance-backed plans, if the parent passes away during the policy term, the insurer may waive future premiums and ensure the planned maturity amount is paid to the child. Therefore, when considering a child’s savings plan, it’s essential to distinguish between pure investment options and those that also provide insurance protection, to ensure it aligns with your financial and security goals.

Here’s how they work:

• You select a plan and choose the premium payment term and policy term.
• You pay monthly, quarterly, half yearly or yearly premiums to keep the plan active.
• The money grows over time and gives returns at maturity.
• In case of the parents' death, the child gets a lump sum, plus future premiums might be waived.
• Some plans also offer partial withdrawals during emergencies .

Key Benefits of Child Savings Plans

Child savings plans are well-suited for long-term financial goals due to their structured benefits and features. They provide life cover for the parent and savings for the child’s goals, like education or marriage. Some plans offer guaranteed* returns, while others are market-linked like ULIPs.

Main benefits include:

• Financial protection for the child.
• Regular savings with guaranteed* or market-linked growth like ULIPs.
• Tax benefits under Sections 80C (only under the old tax regime), in case of old tax regime and 10(10D).
• Support for education, emergencies, marriage etc.
• Partial withdrawals during emergencies for plans like child based ULIPs.

These plans give peace of mind and financial stability for your child’s future.

Tips to Save Money for Your Children’s Future

Saving for your child’s future may seem hard, but it becomes easier with a smart plan. The earlier you start, the more you save. Even small monthly amounts can turn into a big amount over time. Use these tips to grow your savings wisely.

Helpful tips include:

• Start early – Begin saving from your child’s birth.
• Stay consistent – Save regularly, even if the amount is small.
• Use automatic payments – This is to avoid missing premium dates.
• Choose plans with benefits – Like bonus returns.
• Keep a budget – Balance savings and daily expenses smartly.

Discipline and consistency are key to building a strong financial future.

How To Choose the Best Child Savings Plan?

Choosing the right child savings plan means matching it to your goals, budget, and risk of comfort. Some plans offer guaranteed* returns, while others grow with the market like ULIPs. Look for a plan that provides long-term security and flexible options.

Steps to choose the best plan:

• Set your goal – Education, marriage, or emergency funds.
• Pick the right premium – Affordable and regular.
• Review insurance cover – Choose the plan that offers adequate life cover
• Select a trusted insurer – Check reviews and claim settlement ratio or solvency ratio.
• Look at tax benefits – Ensure the plan qualifies under the available tax benefits.

The right plan gives safety and steady savings for years.

Factors To Consider Before Choosing a Child Savings Plan

Before selecting a child savings plan, it’s important to review all key details. Don’t just look at returns—check if the plan suits your lifestyle, goals, and financial comfort.

Important factors to check:

• Goal and duration – How long do you plan to save and for what?
• Returns and risk – Fixed returns or market-linked returns.
• Liquidity – Can you withdraw money when needed
• Premium flexibility – Choosing fixed or adjustable premiums based on income.
• Provider reputation – Choose insurers with high claim settlement or solvency ratio.

Considering these factors helps in picking a plan that works best for your child.

FAQs

Which is the best investment for child education?

The best investment for child education depends on your goals and timeline. Child based ULIPs, PPF, and SIPs in ELSS funds are popular options. Child based ULIPs combine life cover with market-linked investment opportunities, offering long-term growth potential. However, investors should evaluate associated charges and compare them with other instruments for best results. Choose a plan that aligns with your child’s future education costs, , and how long you can save before your child starts higher studies.

What is the best education savings plan for kids?

A child savings plan with life cover and long-term benefits works best for kids. Plans like Child based ULIPs or guaranteed* savings plans offer structured payouts for school or college fees. Sukanya Samriddhi Yojana (for a girl child), PPF , SIPs in mutual funds are also popular choices. Pick a plan that offers steady returns, safety, and flexible withdrawals to match your child’s key education milestones.

Which saving scheme is best for children?

When it comes to savings, some of the savings schemes for children include Child based ULIPs, PPF, Sukanya Samriddhi Yojana (in the case of girls), and SIPs in mutual funds. Each of these life goals has its benefits. ULIPs are life insurance plans which include both life insurance and market linked investments. A PPF is purely a savings scheme but gives fixed returns on money, which is safe. Sukanya Samriddhi is a government-backed investment that works very well for long-term investments/goals for the girl child. SIPs promote creating wealth in the long run. There is no single ideal scheme for children; the choice should depend on the child's age, your financial goals, risk tolerance, and the intended saving period.

Which scheme is best for monthly savings?

For monthly savings some of the plans like child based life insurance , SIPs, PPF, and recurring deposits are good options. SIPs are useful because you can put a small amount in mutual funds every month and, grow your wealth over time. PPF is a government backed savings scheme that offers safe and tax-free returns. Recurring deposits are bank-backed, low-risk saving instruments where you deposit a fixed amount monthly and earn interest. Find a scheme to save regularly that works for your budget, gives you a good return, and helps you to maintain consistency in your savings each month.