Tips to save Rs 1 crore for your children before they turn 18

In the growing market, parents should be cautious about their children's future, especially with the increasing inflation rate and rising cost of living.

In India, the education inflation rate is around 12%, meaning school and college fees double every 6 years.

Let's consider the example of university fees at IIM. In 2009, the fees were 5 lakh, in 2014 they were 15 lakh, and in 2024, the fees are over 20 lakh.

It has become essential to save and invest wisely for a child's future education.

To achieve a goal of saving Rs 1 crore by the time your children turn 18, Neha Nagar, a business and finance content creator and Indian entrepreneur featured in Forbes India's 'India’s Top 100 Digital Stars,' has shared some valuable tips.

Neha recommends opening a 3-in-1 child account, including a bank account, demat account, and trading account.

She suggests that both parents contribute 6500 rupees each month, totalling 13,000 rupees.

This amount should be invested in India's NIFTY50 through Nifty ETFs, such as NIFTY BeES, Nifty 50 ETF, and NIFTY ETF.

By investing Rs 1.56 lakh annually, parents can accumulate 28 lakh in 18 years.

Neha claims that with the historical average returns of 12% for NIFTY50 in the long run, parents can get 1 crore rupees by the time their children turn 18.

Additionally, she advises increasing the annual investment by 10% to ensure the children have more than Rs 1 crore at the age of 18.

This financial strategy not only makes future studies more affordable but also strengthens the financial foundation for expenses like higher education, travel, and marriage.