How can I invest a lumpsum amount of ₹5 lakh for a period of 15 years for the purpose of child’s education? Shall I opt for an STP? Can you suggest some good mutual fund schemes for the same?
The mutual fund route is an excellent method to save and invest for meeting child education expenses. The idea is to save on a regular basis to meet the expenses for meeting the higher education costs. The best way to go forward would be to save by means of Systematic Investment Plan (SIP) on a regular basis.
However, since you have a lumpsum of ₹5 lakh to invest, I would recommend investing in a balanced fund like HDFC Balanced Fund for a
period of 15 years. If you want, you can do two separate transactions in a month of ₹2.5 lakh each.
This fund is in existence since September 2000. The fund has delivered 16.88 per cent CAGR since its inception. Consistency of
performance and a well-managed scheme makes this fund a good option. Balanced funds invest approximately 65 per cent into equity and the balance in to debt products.
- AK Narayan, Founder, AK Narayan Associates