Education Savings in India: Using Equity-led SIPs and Minor Demat Accounts for Kids’ Goals

Education goals deserve their own savings lane. In India, families are leaning on equity-led SIPs and, when appropriate, minor demat accounts to fund kids’ futures. This approach helps keep future costs and investments neatly separated ^[1].

Goal setting and horizon Set a clear corpus target for each child with a long horizon—about 15 years is common. Look at current school fees and add education-specific inflation to estimate the future corpus, then use that to size the SIPs you need ^[1].

Asset mix and timing The typical glide path says stay mostly in equity for the first 10–12 years, then gradually shift to debt in the last 3–5 years. This helps growth ride out volatility while protecting the tail-end needs ^[1].

Tax considerations and MF exposure Profits are taxed at the rate of the higher-earning parent when realized, and transferring stocks to children is tax-free. Mutual fund exposure isn’t mandatory—you can go with direct equities via a minor demat, or MF investments if you prefer ^[1].

Practical setup for kids’ accounts - Open a separate Demat account for the child; you can also have a secondary account in a family member’s name for tax planning. - Use a dedicated bank account for the child so SIPs debit automatically (e.g., via a platform like Kite when set up) ^[1]. - Regularly deposit to reach the target corpus and keep the child’s investments separate from your own ^[1]. - Track each child’s goal as its own account to avoid commingling assets ^[1].

Closing thought: a disciplined, goal-focused setup with clear timelines helps turn education dreams into reality.

References